Tesco Signs Deal For China Joint Venture
Britain's biggest supermarket chain has signed a partnership deal to form China's biggest food retailer.
The joint venture will see Tesco combine its 131 outlets with China Resources Enterprise's (CRE) Vanguard business that already has 2,986 stores.
Tesco will hold a 20% stake and CRE the 80% majority.
Shares in Tesco were up around 1.5% on news of the deal.
The British retail giant, which has seen its dominant home market position weakened by rivals, announced the China venture plan earlier this year.
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 multi-channel business, offering our customers in China the best of modern retail."
Part of Tesco's strategy is to successfully expand into China and India to help offset weakness in Europe.
The London-listed company reported its first annual profit drop for almost two decades in 2012/13.
Tesco is the world's third biggest supermarket chain behind Wal-Mart and Carrefour.
In early 2013, the company landed a partnership with India's Tata Group in a plan to become the first foreign supermarket to enter its domestic retail sector, valued at £300bn.
Along with intense competition in its home market, Tesco decided to close its failed US division Fresh & Easy and to exit from Japan.