Global law firm Freshfields Bruckhaus Deringer (‘Freshfields’) has advised Tesco on the proposed sale of its banking operations across credit cards, loans and savings, and the entry into a long-term strategic partnership with Barclays.

Tesco expects to receive £600m in proceeds from the sale. The sale allows Tesco to remove significant capital-intensive assets and liabilities from its balance sheet and focus on its profitable, capital-light businesses, such as insurance, ATMs, travel money and card cards, which are complementary to its core retail offering.

Under the partnership, Barclays will offer Tesco branded products and services and will provide Tesco with annual income for the use of its brand, growing the customer base through Tesco channels and as a result of Barclays’ participation in the Tesco Clubcard programme. The exclusive partnership will combine Tesco’s market-leading brand, physical & digital reach and relentless customer focus with Barclays’ deep financial services capabilities and expertise in commercial partnerships.

The Tesco legal team was led by Group General Counsel Adrian Morris, Group Corporate Legal Director Andrew Magro, Head of Legal Lauren Cox, Senior Legal Counsel Charlotte Hart, Tesco Bank Legal Director and Company Secretary Fiona Burden and Tesco Bank Head of Legal John Murray.

The Freshfields team was led by partners Claire Wills and Andy Robinson and senior associates Michael Black and Lucy Cliff. Partner Richard Lister and senior associate Tom Hingley led on advice on the long-term strategic partnership. Partners James Smethurst, Rikki Haria, Alice Greenwell, Andrew Murphy and Pete Allen advised on financial regulatory, anti-trust, employment, pensions and finance matters respectively.