Kipa’s parent Tesco in talks on options
Turkish retailer Kipa has said its parent company Tesco is in the first stages of talks with various companies, few days after media reports hinting at merger.Turkish retailer Tesco Kipa, in response to recent media reports, said yesterday that its British parent Tesco was in the first stages of talks with various companies regarding various options.
The Financial Times reported on Feb. 21 that Tesco, under pressure to turn around declining sales in its domestic market, was considering reducing its exposure to Turkey.
Tesco, the world’s third-largest retailer, is looking at combining its operations in Turkey, where it trades as Kipa, with the country’s biggest food retailer Migros, the paper reported, citing people familiar with the situation.A deal could be along the lines of that which last year enabled it to fold its unprofitable Chinese operation into a state-run Chinese company as a minority partner.
In July, BC Partners had hired JP Morgan and Bank of America to review options for its stake in Migros and a sale might be in the cards.
Tesco is almost two years into a 1 billion pound ($1.6 billion) turnaround plan in Britain, where it generates two thirds of its revenues but has been losing ground after focusing investment on overseas expansion.
The retailer said in October that its 191 stores in Turkey had a poor first half and that some restructuring of operations in the east of the country was possible.