, LONDON, May 29- British supermarket giant Tesco has completed the creation of its Chinese joint venture, forming the largest multi-format retailer in China, it said on Thursday.
The groups had already revealed plans earlier this year to combine Tesco’s 131 branches and shopping mall operation in China, with China Resources Enterprise’s Vanguard business that has 2,986 stores.
London listed Tesco has a 20-percent stake and CRE has 80 percent of the venture, which is the biggest food retail business in China.
“We’re very pleased to have completed this historic agreement,” said Tesco chief executive Philip Clarke.
“The partnership creates a strong platform in one of the world’s largest markets.
“We can now combine our strengths to build a profitable multichannel business, offering our customers in China the best of modern retail.”
Tesco, which is Britain’s biggest retailer, hopes that expansion into India and China can offset weakness in Europe.
Earlier this year, the company, the world’s third biggest supermarket group, also struck a joint-venture deal with India’s Tata Group to become the first foreign supermarket to enter the country’s $500 billion (362 billion euro) retail sector.
The Asian deals are attempts by Tesco to transform its fortunes after suffering in 2012/13 the group’s first drop in annual profits for almost two decades.
Tesco is battling weaker sales in main market Britain, and over the past two years has decided to close its failed US division Fresh & Easy and to exit from Japan.