After nine years in the Japanese market, Tesco has announced that it has formalised its exit arrangements. The British retailer has signed an agreement with Aeon, the Asian country's largest retail group, to sell 50 per cent of its shares in Tesco Japan for a nominal sum.
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.
The British retailer’s decision to exit the Japanese market will result in the formation of a joint venture with Aeon. As part of this, Tesco will invest approximately £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, CEO 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.
The British retailer announced its decision to sell its Japanese business in 2011.
Aeon operates over 1,200 supermarket stores across Japan. In fiscal year 2011-2012, Aeon’s operating revenue and operating profit were ¥5206.1bn and ¥195.6bn, respectively.