Tesco said that its C Two Network convenience store unit in Japan is to buy the neighbourhood supermarket business of Frec in Tokyo.

Tesco said that C2 has been appointed by the Industrial Revitalisation Corporation of Japan "to sponsor the rehabilitation of Frec".

The deal will see Frec's supermarket business of 27 stores and related assets demerge into C2 and to include £16m of debt.

Tesco said it would introduce C2's processed and packaged foods supply chain into Frec and in turn C2 would learn from Frec's successful fresh food operation.