UK based Tesco would lend US billionaire Ron Burkle's Yucaipa investment firm GBP80 million. The cash would be used to take the loss-making Fresh & Easy stores off its hands. This would mark the end of a six year attempt crack to the US market.
Tesco said on Tuesday that it would acquire 150 Fresh & Easy's stores. It would also purchase its Riverside distribution and production facilities. California based Fresh & Easy employees would also transfer to the new business.
The deal had represented a further reduction in Tesco's international portfolio. Tesco had pulled out of Japan in 2012 and just last month, the company said it would fold its unprofitable Chinese operation into a state-run firm as a minority partner.
In April, Tesco said that it would either sell or close Fresh & Easy.
The GBP80 million loan to Yucaipa would be secured under the Riverside Campus facility.
Tesco said that the cost of closing around 50 Fresh & Easy stores would not be included in the deal. The expenses and loan would not exceed GBP150 million.
Join the Conversation