The U.K.'s largest supermarket chain Tesco has agreed to sell its businesses in Thailand and Malaysia for US$10.6bn, as it continues its exit from the Asian market.

The sale will be made to a combination of CP Group entities, namely C.P. Retail Development Company Limited, Charoen Pokphand Holding Co., CP All Public Limited Company and C.P. Merchandising Co.

On completion, Tesco will no longer have interests outside of Europe as it exited China last month through the sale of its 20% interest in a joint venture for £275m (US$361m).

The company says it plans to return £5bn (US$6.7bn) to shareholders once the transaction is finalized. It added that board had unanimously decided the deal was in its shareholders' best interests.

Completion of the transaction, which is conditional on Tesco shareholder approval and customary regulatory approvals in Thailand and Malaysia, is expected during the second half of 2020

Tesco says the move will further simplify the business, enabling a "stronger focus on driving cash generation and returns to shareholders from our retail businesses in the UK and Ireland and in Central Europe".

"Following inbound interest and a detailed strategic review of all options, we are announcing today the proposed sale of Tesco Thailand and Tesco Malaysia," said Tesco chief executive Dave Lewis.

"This sale releases material value and allows us to further simplify and focus the business, as well as to return significant value to shareholders. I would like to thank all of our Tesco Thailand and Tesco Malaysia colleagues for their dedication, professionalism and service to our customers, which has resulted in the creation of such a strong business.

"I am confident that the agreement we have reached with CP Group presents an exciting opportunity for their continued success."

The move will leave Tesco with 3,769 stores across the U.K. and Ireland and 895 sites in eastern Europe.

Tesco shares were in the red on Monday as the wider market came under renewed coronavirus-linked pressures but were outperforming rivals and just 0.3% lower by mid-morning on Monday.