TESCO has finalised a joint venture with the state-run China Resources Enterprise (CRE) to create China’s largest food retailer.
The deal combines Tesco’s 134 Chinese outlets with CRE’s 2,986 stores, called Vanguard.
CRE will own 80 per cent of the new chain and Tesco will have a 20 per cent stake.
Tesco chief executive Philip Clarke said: “We’re very pleased to have completed this historic agreement. The partnership creates a strong platform in one of the world’s largest markets. We can now combine our strengths to build a profitable multichannel business, offering our customers in China the best of modern retail."”
Tesco said the joint venture was an ideal combination of Tesco’s “best-in-class retail practices, international sourcing and multichannel capabilities”, combining with CRE’s “strong local knowledge and brand”.
Tesco, which is also in the process of investing in India, announced the deal last October as it reported a sharp slump in European profits and flat UK sales in the first half of the financial year.
The joint venture cleared its last hurdle earlier this month when it was passed by the Anti-Monopoly Bureau of the Chinese Ministry of Commerce (Mofcom).