Tesco has announced today that it has signed a JV agreement for the Hymall chain stores in China.
The 50:50 agreement is between Tesco and Ting Hsin, for its wholly owned subsidiary of Ting Cao, which owns the Hymall stores. Tesco will acquire 50% of the equity for Hymall for £140m cash, valuing the business at £280m.
Hymall currently operates 25 hypermarkets and it has plans to open another 10 stores over the coming year. For 2003 the business recorded sales of £330m and pre-tax profit of £5.5m.
Tesco chief executive Sir Terry Leahy said: “China is one of the largest economies in the world with tremendous forecast growth and a market we have researched extensively over the last three years.
“We believe Tsing Hsin is the right partner and Hymall is the right store chain for our strategic move into this exciting market.”
This agreement is evidence of Tesco pursuing its international expansion, which forms part of its four-part strategy for growth.