The board of directors of Charoen Pokphand Foods (CP Foods) approved a measure to acquire an economic interest in Tesco Asia Group, which is a leading retailer under the Tesco Lotus brand in Thailand and Malaysia.

The board members agreed to acquire up to 20% of the total issued shares of Tesco Asia Group, according to a press release from CP Foods. 

Prasit Boondoungpraset, CP Foods CEO, said that the company’s investment in Tesco Asia is aimed to further strengthen its value chain in term of distribution channels in Thailand and Malaysia and enhancing the range of consumer options in this space. He added that CP Foods is planning to modernize its distribution channels of meat products to better appeal to consumers.

CP Foods is confident the investment presents opportunities for enhancing Thai and Malaysian consumer experiences in an already highly competitive sector.

According to the release, this venture should boost sales of both Tesco and CP Foods. Tesco Asia has already been consistently reporting strong operating results, and the retailer’s team have adapted well to changes in the business environment.

The investment is subject to the full satisfaction of conditions precedent, including obtaining the resolution of shareholders’ meeting of Tesco U.K. approving the sale of shares in Tesco Asia Group, the approval of the Office of the Trade Competition Commission (where an application for approval is to be submitted) and the approval of the Ministry of Domestic Trade and Consumers Affairs of Malaysia in respect of the relevant transaction in Malaysia. The transaction is expected to be concluded by the end of 2020.

Headquartered in Thailand, Charoen Pokphand Foods is the world’s sixth largest broiler company and fourth largest egg company, according to the Poultry International Top Companies rankings. It is also the world’s largest producer of animal feed.