British retailer Tesco Plc (LON:TSCO) said on Monday it would sell 50% in its Japanese business to domestic sector player Aeon Co Ltd (TYO:8267) as part of a planned two-stage exit from this market.
Tesco said it would get a nominal price for the stake in Tesco Japan and will then create a joint venture with Aeon. Under the terms of the JV, the British supermarket giant would invest some GBP40m (USD63m/EUR49.4m) as a partner to fund additional restructuring at the business. After this move, Tesco would have no further financial exposure to the Japanese business or its operations, it said.
Tesco’s CEO, Philip Clarke, welcomed the transaction in a comment saying it would provide the best outcome for employees, Japanese customers and the group’s shareholders.
The British group, which unveiled plans to shed its Japanese business in 2001, said the completion of the deal is pending regulatory clearance.
Tesco Japan is made of 117 Tsurakame, Tesco and Tesco Express small stores located in the greater Tokyo area.
UK’s Tesco stepped into Japan in 2003 when it bought C2 Network, operating the Tsurakame branded stores.
Aeon runs more than 1,200 supermarkets in Japan. The group has 12 core retail businesses, which, apart from the supermarket operations, also include a general merchandise store business and strategic small size store business.