Shares in Tesco edged up 0.3pc to 372.2p in early trading after Tesco (LSE: TSCO.L - news) confirmed on Tuesday evening that it has agreed to sell Fresh & Easy to investment firm Yucaipa, which is run by US billionaire Ron Burkle.
Tesco faces total costs of up to £150m from the sale, including an £80m loan to Yucaipa and the cost of closing the remaining stores that the US firm does not want to buy.
This is on top of the £1.2bn writedown Tesco has already taken on its US assets earlier this year after deciding to pull the plug on its loss-making Fresh & Easty venture.
The costs of the deal highlights the scale of the problems the British supermarket group faced across the Atlantic since Sir Terry Leahy took Tesco to the US in 2007.
Yucaipa is buying 150 stores and Fresh & Easy’s distribution centre, which safeguards the future of 4,000 jobs. However, Tesco will have to close a further 50 stores, meaning that 1,000 workers are likely to lose their job.
In return, Tesco will receive warrants over 32.5pc of shares in Yucaipa, which will activate if the Fresh & Easy assets flourish under new owners.
It is understood that Mr Burkle could use the Fresh & Easy stores to relaunch the Wild Oats brand in the US.
Clive Black, analyst at Shore Capital, said: "Cutting to the chase we believe that this is good news for investors in Tesco as it brings to an end a disappointing venture stateside.
"In addition to the removal of a distraction of sorts for management, the deal permits a little more focus on the continuing businesses.
"Whilst we welcome the announcement of the exit of Tesco from the USA, the outcome is not quite as sweet as management guided to at the group's preliminary results in April 2013.
"Whilst not a game changer in the big scheme of things, the sale process has dragged on longer than we expected, so adding to ongoing trading losses.
"We expect those trading losses, which will be treated as 'discontinued' in the forthcoming interim results update, to be little short of £100m, taking into account the completion time further losses can be expected in H2."
Tesco entered the US in 2007, but its attempt to create a chain of convenience stores selling fresh food has been ruined by the economic downturn, poor store locations, and apathy towards the brand from shoppers on the west coast of the US.;
Philip Clarke, chief executive, said: “The decision we are announcing 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."
Mr Clarke replaced Sir Terry as Tesco chief executive in March 2011. The US business is the third underperforming international operation that Mr Clarke has decided to exit. Tesco has also agreed to sell a majority stake in its Chinese business, while it had to pay £40m to quit Japan.
Yucaipa was founded by US billionaire Ron Burkle and it is thought he wants to use the Fresh & Easy stores to relaunch the Wild Oats brand in the US.