Tesco has agreed to sell its businesses in Thailand and Malaysia for $10.6bn following “inbound interest” from a combination of business, including Thailand’s largest private company, Charoen Pokphand.

The supermarket says the sale will “further de-risk the Tesco business” by reducing its debt by £2.5 billion, and the board at Tesco say that they intend to return around £5bn to shareholders once the sale is completed in the second half of 2020.

With nearly 2,000 stores in Thailand and 74 stores in Malaysia, the move is Tesco’s latest step back from Asia, having previously sold its South Korean HomeSense business in 2015.

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

“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.”