CRE gains approval for Tesco joint venture

By Ding Yining | May 29, 2014, Thursday |

Online Edition

China Resources Enterprise said today it has gained regulatory approval for its joint venture with UK supermarket operator Tesco Corp. It will combine its almost 3,000 outlets in China with about 130 Tesco stores in the country.

"The joint venture combines Tesco's retail practices, international sourcing and multichannel capabilities with CRE's strong local experience to create the largest food retailer in China," Tesco said in a statement.

CRE will hold 80 percent of the joint venture with Tesco holding the remainder, it said in a separate stock exchange filing.

Tesco said the Anti-Monopoly Bureau of the Chinese Ministry of Commerce unconditionally approved the transaction earlier this month.

“We’re very pleased to have completed this agreement, and we can combine our strengths to build a profitable multichannel business in one of the world’s largest markets,” Philip Clarke, chief executive officer of Tesco, said in the statement.

CRE estimated the joint venture’s annual sales could reach 95 billion yuan (US$15.2 billion).

CRE Chief Financial Officer Frank Lai told Reuters earlier this year that he expected Tesco China to be profitable in two to three years and that it could combine sales from the joint venture in the third or fourth quarter this year.

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CRE gains approval for Tesco joint venture

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