Tesco to merge with CRE in China

<p>Talks are ongoing over a merger between the two firms.</p>

UK supermarket chain Tesco is in talks with China Resources Enterprise (CRE) over a merger in the Asian nation.

If a deal can be done, CRE would own 80 per cent of the new venture and Tesco would be left with 20 per cent, with the two companies merging their stores in China.

Tesco has 131 stores in China and CRE runs almost 3,000 shops, so the merger would create a powerful new supermarket chain in the Asian country.

CRE said the merger would lead to a "deep understanding of local customers, established nationwide infrastructure and proven track record as a partner with Tesco's global retail expertise, international sourcing scale and supply chain capabilities".

Tesco, which is the biggest supermarket chain in the UK, has struggled to assert itself on the Chinese market since opening its first stores in the nation almost a decade ago.

The share price of Tesco is slightly up this morning on the news of the proposed merger with CRE. At 08:24 BST, its stocks were up by 0.79 per cent on the start of the session.

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