Tesco has formed a partnership with state-run China Resources Enterprise (CRE) in a deal the company says will create the largest food retailer in the Asian country.
CRE already runs 3,000 stores in the Far East nation and these will be in addition to the 131 shops operated by Tesco in China. The terms of the deal state that Tesco will take a 20 per cent stake in the new company, with the remaining 80 per cent controlled by CRE.
Tesco chief executive Philip Clarke said: "We can now combine our strengths to build a profitable multichannel business, offering our customers in China the best of modern retail."
China has a rapidly expanding middle class and retailers such as Tesco are increasingly turning to the country as a way to boost their business and to target a brand new market. Luxury retailers have had particularly strong success in China in the last few years as demand for products such as jewellery has rocketed.
Following the announcement, shares in Tesco have risen slightly this morning. By 08:29 BST on the London Stock Exchange, stocks in the supermarket company were up 0.28 per cent.
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