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LONDON - Britain's Tesco on Wednesday announced its first expansion into China via the purchase of a 50 percent stake in the Hymall chain of hypermarkets. Tesco joins other global retail contenders--including Wal-Mart, Metro, and Carrefour--seeking to capitalize on the sixth largest economy in the world.
Tesco announced in a press release that it had signed an agreement with food company Ting Hsin International Group to buy half of Hymall's equity for $260 million in cash. The Hymall chain of 25 stores is owned by Ting Cao, a wholly owned subsidiary of Ting Hsin. Tesco said it expected the transaction to complete within four months.
"China is one of the largest economies in the world with tremendous forecast growth, and a market we have researched extensively over the last three years," Tesco chief executive Sir Terry Leahy said. "Ting Hsin is the right partner and Hymall is the right store chain for our strategic move into this exciting market."
Leahy said Hymall is a leading retailer in Shanghai, China's largest retail market, and has plans to open up to 10 more stores in the coming year. "The chain of 25 hypermarkets provides an excellent base of stores from which we can grow together," he said.