In line with its announcement last August that it planned to sell its loss-making business in Japan, Tesco has today entered into an agreement with Aeon to exit the country in a two stage process.
In the first phase Tesco will sell 50% of its shares in Tesco Japan to Aeon, Japan’s largest retail group, for a nominal sum. This will result in the formation of a joint venture with Aeon. As part of this, Tesco will invest a further £40m as a joint venture partner to finance further restructuring, after which Tesco will have no further financial exposure to the Japanese business or its operations.
Philip Clarke, Chief Executive Officer of Tesco, 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."
Tesco entered Japan 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.
Aeon is Japan's largest retailer with 12 core retail businesses including a general merchandise store business, supermarket business and strategic small size store business. Aeon operates over 1,200 supermarket stores across Japan. In FY2011/2012, Aeon's operating revenue and operating profit were JPY5,206.1bn and JPY195.6bn, respectively.
NamNews - Monday 18th June 2012