New Delhi: British retail major Tesco on Friday announced forming of an equal joint venture with Trent Ltd, a part of the Tata Group, by picking up 50 percent stake in Trent Hypermarket Ltd for about 85 million pounds.
"Following its previous announcement and receipt of approval from the Indian Foreign Investment Promotion Board, Tesco has on Friday entered into an agreement with Trent Ltd, a part of the Tata Group, to form a 50:50 Joint Venture in Trent Hypermarket Ltd (THL)," the company said in a statement.
THL operates the Star Bazaar retail business in India. Tesco's investment will be around 85 million pounds, it added.
"On completion of the transaction THL will operate 12 stores retailing a range of merchandise, including food and grocery, personal and home-care products, home and kitchen, fashion and accessories etc," Tesco said.
The stores are operated under the 'Star Bazaar' and 'Star Daily' banners, and spread across the Southern and Western regions of India, it added.
Last December, Trent and Tesco had announced they have sought regulatory approval to enter into a partnership where each would own a 50 percent stake in THL, owned by the Tatas.
Tesco became the first global retailer to apply for multi-brand retailing after the government allowed 51 percent FDI in the segment in September, 2012. The Foreign Investment Promotion Board had cleared its proposal on December 30.
Since 2008, Tesco has had a wholesale supply and franchise/technical service agreement to supply merchandise and provide technical knowhow and support to THL in India.
First Published: Friday, March 21, 2014, 19:32