Tesco announces JV with Tata’s Trent for multi-brand retail in India
21 Mar 2014
British retail giant Tesco Plc today formally announced the signing of a joint venture agreement with Tata group retail chain Trent Hypermarkets Ltd (THL), becoming the first multinational to enter multi-brand retail operations in India.
Tesco will invest around £85 million (Rs850 crore) to acquire a 50-per cent stake in Trent Hypermarkets Ltd (THL), which will operate the 50:50 joint venture under the Star brands.
''Following its previous announcement and receipt of approval from the Indian Foreign Investment Promotion Board, Tesco has entered into an agreement with Trent Limited, part of the Tata Group, to form a 50:50 joint venture in Trent Hypermarket Limited (THL), which operates the Star Bazaar retail business in India,'' Tesco said in a release today.
Tesco said the completion of the transaction will be subject to other necessary approvals.
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.
The stores will be operated under the 'Star Bazaar' and 'Star Daily' banners, and spread across the southern and western regions of India, Tesco said.
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.
Tesco operates in 12 markets across the world employing over 530,000 people and serving millions of customers each week.
Trent and Tesco had last December sought regulatory approval to enter into a 50:50 partnership in THL, owned by the Tatas.
Tesco also is the first global retailer to apply for multi-brand retailing after the government allowed 51 per cent FDI in the segment in September 2012. The Foreign Investment Promotion Board had cleared its proposal on 50 December.
Since 2008, Tesco has had a wholesale supply and franchise / technical service agreement to supply merchandise and provide technical know-how and support to THL in India.