Aeon to buy Japan business of British retailer Tesco | WPN World People News

British retailer Tesco, which has been looking for a buyer for its operations in Japan for almost a year, has struck a deal to sell 50 per cent of its stake to Japanese retail major Aeon for a "nominal sum".

Tesco said it would exit Japan in two stages. The first stage will see sale of 50% of its shares in Tesco Japan to Aeon for a nominal amount. Once in the joint venture with Aeon, Tesco said it would then invest about 40million pounds into the Japanese business to finance further restructuring.

Thereafter, Tesco said that it would have no further financial exposure to the Japanese business. The largest British retail chain had last year announced plans of selling its Japan business comprising 117 small supermarkets, the smallest among its international business.

"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," Tesco chief executive Philip Clarke said in a statement.

Tesco, which entered Japan in 2003, operate under the brands the Tsurakame, Tesco and Tesco Express brands in the Greater Tokyo area.

Completion of the transaction was subject to normal regulatory approval, said the Tesco, which is struggling to revive business in its home market after reporting drop in sales for a fourth straight quarter in June

Aeon will probably buy the stake in Japan's autumn, Koji Tsusue, a spokesman for the Tokyo-based company, told reporters Monday, declining to give details of the deal.

For Aeon, the new acquisition follows two earlier buyouts of regional grocers Marunaka Co. and Sanyo Marunaka KK.

Source:The Asia News.Net