(MENAFN - AFP) Britain's biggest retailer, supermarket group Tesco, said Tuesday it had struck a deal to sell most of its loss-making US West Coast chain Fresh & Easy to investment group Yucaipa.
Tesco, which in April had announced plans to offload Fresh & Easy, said Yucaipa would acquire more than 150 stores as well as distribution and production facilities. The remaining 50 stores will close.
More than 4,000 out of 5,000 staff will transfer to the new business, which Tesco will loan about 80 million (126 million, 95 million euros), the British group said in a statement.
Yucaipa managing partner Ron Burkle, however, vowed to continue to build Fresh & Easy into a "next-generation convenience retail experience, providing busy consumers with more local and healthy access."
The cost of shutting stores, the loan and other expenses will total up to 150 million, according to Tesco.
"The sale to Yucaipa, which is subject to the necessary legal and regulatory approvals, is expected to complete within three months," Tesco said in the statement.
Tesco chief executive Philip Clarke added: "The decision we are announcing today represents the best outcome for Tesco shareholders and Fresh & Easy's stakeholders.
"It offers us an orderly and efficient exit from the US market, while protecting the jobs of more than 4,000 colleagues at Fresh & Easy."
Fresh & Easy, which opened in late 2007, has stores across California, Nevada and Arizona. Its head count includes 1,300 workers at its distribution and manufacturing facilities.
In a statement responding to the Tesco announcement, Yucaipa boss Burkle said: "Tesco should be applauded for giving their customers an affordable, healthy, convenient shopping experience.
"Its dedicated employees and great base of customers give us a solid starting point to complete Tesco's vision with some changes that we think will make it even more relevant to today's consumer."
Tesco in April reported a 1.2-billion hit from Fresh & Easy, sparking the first drop in the British supermarket's annual profits for almost two decades.<