Tesco to sell its Japanese business to Aeon
Aeon Corp, Japan’s largest retail group, has said it will take a 50% stake in Tesco Japan for a nominal sum.
Tesco put the under-performing business up for sale last August after eight years of trying to break into the Japanese market. It entered the country in 2003 through the acquisition of C2 Network, which ran stores under the Tsurakame brand. The business currently comprises 117 small stores, primarily under the Tsurakame, Tesco and Tesco Express fascias in the Greater Tokyo area.
In a statement Tesco said it will exit Japan in a two stage process. In the first phase Tesco will sell 50% of its shares in Tesco Japan to Aeon and will form a joint venture with the Japanese retailer. As part of this, Tesco will invest a further £40 million to finance further restructuring, after which it will have no further financial exposure to the Japanese business or its operations.
Philip Clarke, Tesco chief executive said: "I thank our colleagues in Japan, who have done an excellent job for the business - in particular over recent months. We are very pleased to announce this deal with Aeon today, and are confident that this will deliver the best outcome for our staff, for our customers in Japan and for our shareholders."
Aeon operates over 1,200 supermarket stores across Japan. In 2011/2012 the group's operating revenue and operating profit were JPY5,206.1 billion and JPY195.6 billion, respectively.
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