10th Sep 2013 16:30
LONDON (Alliance News) - Tesco PLC said Tuesday that it had sold a substantive part of its Fresh & Easy business in the US to YFE Holdings Incorporated, an affiliate of Yucaipa Companies LLC, having previously said it would exit the business.
Yucaipa will acquire more than 150 stores, as well as Fresh & Easy's Riverside distribution and production facilities. Tesco will loan the new business GBP80 million as part of the deal, secured against the Riverside Campus facility.
It expects the sale to be complete within three months.
"The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy's stakeholders," said Chief Executive Officer Phillip Clarke in a statement. "It offers us an orderly and efficient exit from the US market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy."
Tesco has nearly 200 Fresh & Easy stores, but the sale of the bulk of the business marks the end of its failed attempt to break into the US market. It had previously warned that talks to sell the business had stalled, making it more likely it would have to close the business. It has said it wanted to make sure it is not left with any liabilities for the US operations.
Yucaipa is the investment vehicle of US billionaire Ron Burkle. It already owns US supermarket chain Wild Oats.
Tesco's shares closed at 372.6572 pence Tuesday, up 1.47%.
By Hana Stewart-Smith; [email protected]; @hanassallnews
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