Tesco eyes up Eastern expansion
Hsin in China, as part of its strategy to capitalize on emerging
markets.
The deal, worth £180m (€266), will catapult the British company's shares from 50 to 90 per cent. This is an extension of an agreement Tesco signed in 2004 for a 50 per cent stake in Ting Hsin's subsidiary Ting Cao, which owns a Hymall chain of 44 hypermarkets in China.
"We have seen exciting growth in China since announcing the joint venture two years ago and are looking forward to the partnership entering a new phase," said Terry Leahy, Tesco CEO.
The company has a focused growth strategy in three areas including the north in Beijing and Tianjin, the east in Shanghai and in the south in Guangzhou. The food retailer made the investment to increase its market share in China as part of its strategy for global expansion by entering emerging markets, Tesco spokesperson Greg Sage told FoodandDrinkEurope.com.
"As Ting Hsin focuses its efforts on its increasingly successful food business, it is appropriate at this time to review the joint venture so as to facilitate faster progress by ensuring greater Tesco involvement," said Wei Ying-Chiao, chairman of Ting Hsin.
Tesco said that the working partnership is mutually beneficial as it allows the food retailer to take advantage of Ting Hsin's knowledge of the Chinese market.
In a similar move last week Tesco announced the acquisition of the Makro business in Malaysia, adding eight Makro cash and Carry stores to its portfolio. The company commented that the move would help it both strengthen its position in the market and bring it one step closer to becoming the market leader in Malaysia.
