Tesco, the UK’s biggest food retailer, is raising its stake in the Chinese hypermarkets chain Hymall, by paying around £180 million to take its share of the business to 90 per cent from a previous 50 per cent.
Over two years ago the company signed an agreement with the Taiwanese Ting Hsin International for a 50 per cent stake in its wholly owned subsidiary Ting Cao, which owns the Hymall chain of 44 hypermarkets in China .
Tesco said the deal will allow the partnership to ‘accelerate its growth in China whilst continuing to benefit from Ting Hsin’s invaluable local knowledge’.
“We have seen exciting growth in China since announcing the joint venture two years ago and are looking forward to the partnership entering a new phase,” said Sir Terry Leahy, Tesco’s Chief Executive.
“Ting Hsin continues to be a large shareholder in the business . They are a valued supplier of food products and we benefit from their unrivalled local knowledge as we grow the Hymall business together,” he continued.
Ting Hsin said it was dedicated to remaining a shareholder in the Hymall company and would offer Tesco ‘guidance and local expertise as it currently gains experience in China’ .
Tesco plans to focus its expansion on three key areas, the north (including Beijing and Tianjin), the east (including Shanghai ) and the south (including Guangzhou) .
The first store is expected to open in the capital Beijing early in the new year.
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