British retail giant Tesco Plc said on Friday that it will set up a joint venture with China Resources Enterprise (CRE) to operate supermarkets in China.
Tesco will take a 20-percent stake in the new joint venture with CRE controlling 80 percent, Tesco said in a statement to Xinhua.
The joint venture will combine Tesco's 131 stores in China and its shopping mall business with CRE's 2,986 stores, called Vanguard, on the Chinese mainland and Hong Kong, it said.
The move will bring together CRE's "deep understanding of local customers, established nationwide infrastructure and proven track record as a partner with Tesco's global retail expertise, international sourcing scale and supply chain capabilities," CRE said in a statement to the Hong Kong Stock Exchange on Friday.
Tesco said in the statement that the deal is still subject to further due diligence and agreement of final terms and there is still uncertainty about the transaction.
As Britain's largest retailer, Tesco first started operating in China in 2004.