FIPB nod will allow to work on setting up JV with Trent: Tesco
New Delhi: The apporval by FIPB to the proposal to invest USD 110 million in the Indian multi-brand retail segment will allow to work on practicalities of setting up a joint venture with Tata group firm Trent, UK-based Tesco Plc said Monday.
"Tesco is pleased that the FIPB has agreed to our proposal. This will now allow us to work on the practicalities of setting up the Joint Venture with Trent. Any such announcement will be made in the usual way," a Tesco spokesperson said.
The UK-based firm became the first global retailer to get approval to enter country's multi-brand retail sector from the Foreign Investment Promotion Board (FIPB) since the government allowed 51 percent foreign direct investment (FDI) in multi-brand retailing in September last year.
The retail major plans to initially invest USD 110 million in the multi-brand retail foray, including for the acquisition of 50 per cent stake in Trent Hypermarket Ltd, a wholly-owned subsidiary of Trent Ltd.
In 2008 Tesco PLC had announced setting up of a wholesale cash-and-carry business in India, with an initial investment of up to 60 million pounds in the first two years.
It had also entered into an exclusive franchise agreement with Trent to provide expertise and technical capability to support the Indian firm in the running of hypermarket business, under Star Bazaar stores.
Under their existing partnership, Tesco's wholesale business supplies merchandise to Star Bazaar.