Chief Executive Dave Lewis joined Tesco in 2014 when the firm was in crisis, its profits battered by market share losses at home to discounters Aldi and Lidl. A damaging accounting scandal was then uncovered shortly after his appointment.

He is focussed on reviving Tesco's main grocery business in Britain and also wants to cut debt to rid the group of its junk credit rating.

This month Tesco agreed on the sale of its Turkish business and the Giraffe restaurant chain in the UK.

Last year, Lewis sold Tesco's South Korean arm for $6.1 billion, which means the firm now only has overseas businesses in Thailand and Malaysia, central Europe and Ireland.

Tesco bought Dobbies in 2007, and it grew to become the UK's second largest specialist garden centre retailer, operating from 35 locations. It contributed 17 million pounds to Tesco's profit in 2015-16.

It has now been sold to an investor group led by Midlothian Capital Partners and Hattington Capital.

"We believe this agreement will give Dobbies a bright future, while allowing our UK retail business to focus on its core strengths," said Lewis.

In April, Tesco reported its first rise in underlying operating profit in four years and its first quarter of underlying UK sales growth for more than three years.

However, shares in Tesco are still down 27 percent year on year.

They were up 0.3 percent at 153 pence at 0705 GMT, valuing the business at 12.5 billion pounds.

Tesco will update on first quarter trading on June 23.

(Reporting by James Davey; editing by Jason Neely)