Tesco and China Resources Enterprise reach retail deal
Tesco has finalised a deal with the state-run China Resources Enterprise (CRE) to create the largest food retailer in China.
The joint venture will combine Tesco's 131 outlets in the country with CRE's almost 3,000 stores, called Vanguard.
CRE will own 80% of the new chain and Tesco will have a 20% stake.
"The partnership creates a strong platform in one of the world's largest markets," Tesco chief executive Philip Clarke said in a statement.
"We can now combine our strengths to build a profitable multichannel business, offering our customers in China the best of modern retail."Asian growth
According to figures from research group IGD, China is the world's biggest market for food and groceries with an annual value of more than one trillion dollars.
And the market is forecast to grow by 50% over the next three years.
Tesco, the biggest supermarket chain in the UK, has been keen to tap into this potential, and has been operating in the country since 2004.
The firm has also been eyeing the Indian market - which is forecast to witness rapid growth in the coming years.
Earlier this year, it announced a joint venture with Trent Limited, part of India's Tata Group, which operates the Star Bazaar retail business in India.
Tesco said it would invest around £85m in the joint venture.
Once the venture has been finalised it will operate 12 stores retailing a range of products including groceries and home care products.