British retail major Tesco on Friday announced that it was forming an equal joint venture with Trent Ltd., a part of the Tata Group, by picking up 50 per cent stake in Trent Hypermarket Ltd (THL) for about Rs.850 crore.
This is further to the earlier announcement regarding investment by Tesco plc U.K. in THL.
In a filing to the Bombay Stock Exchange (BSE), Trent said both parties have entered into definitive agreements that envisage that Tesco Overseas Investments (Tesco Overseas), a wholly-owned subsidiary of Tesco would buy part of the equity shares held by the company in THL for about Rs.150 crore and would separately subscribe to additional THL equity shares for an amount of about Rs.700 crore.
In December 2013, Tesco and Trent said they had sought regulatory approval to enter into a joint venture where they would both own equal stake in THL. Tesco was the first international retailer to apply for a multi-brand retailing licence when it was opened up for 51 per cent foreign direct investment (FDI) in September 2012 and its proposal was cleared in December 2013.
“Following the conclusion of the proposed investment, the company and Tesco Overseas will each hold a 50 per cent stake in THL. The proposed investment by Tesco Overseas is subject to necessary approvals,’’ Trent said in the statement.
THL operates the Star Bazaar retail business in India.