Tesco Plc said it will regain sole ownership of 21 supermarkets in an asset-swap transaction with British Land Co., part of Chief Executive Officer Dave Lewis’s efforts to revive the struggling U.K. grocery leader.
In exchange for British Land’s interest in a joint venture controlling the stores, Tesco will hand the real-estate company its stake in three shopping centers, three retail parks and three other standalone stores, according to a statement released on Friday.
As part of the deal the Cheshunt, England-based grocer will receive 96 million pounds ($142 million), reflecting the difference in value between the assets being exchanged.
Tesco, which has an annual rent bill of about 1.4 billion pounds, said the deal enables it to protect itself from further rent increases on some sites. CEO Lewis is seeking to restore the company’s focus on its main grocery business after it became distracted by forays into peripheral activities such as the Blinkbox movie-streaming service.
“This transaction with British Land allows us to increase our ownership and thereby insulate more of our businesses from indexed rent reviews,” Lewis said in the statement. “This agreement makes our business simpler and stronger.”
News by Bloomberg, edited by ESM
