Tesco Completes JV with China Resources Enterprise

By Razak Musah Baba

LONDON--Supermarket chain Tesco PLC (TSCO.LN) said Thursday it has completed the formation of a joint venture with China Resources Enterprise Ltd., (CRE) to create the leading multi-format retailer in China.

The joint venture would involve CRE combining its CR Vanguard business, which currently operates 2,986 stores across China and Hong Kong, with Tesco China's 131 stores and shopping mall business.

Philip Clarke, chief executive of Tesco said: "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."

In August last year, Tesco said it had entered into a memorandum of understanding with China Resources Enterprise, adding they are in exclusive talks to combine their Chinese retail operations to form the leading multi-format retailer in China.

Tesco said the joint venture combines its retail practices, international sourcing and multichannel capabilities with CRE's strong local knowledge and brand, to create the largest food retailer in China.

Tesco shares at 0711 GMT traded up 0.1% at 302 pence, valuing the company at GBP24.49 billion.

-Write to Razak Musah Baba at [e-mail]; Twitter: @Raztweet

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