CHESHUNT, U.K. — Tesco here said Monday it has reached an agreement to exit Japan by transferring its interests there to Aeon, Japan’s largest retailer.
Tesco plans first to sell 50% of its shares in Tesco Japan to Aeon for a “nominal sum,” resulting in the formation of a joint venture with Aeon. In addition, Tesco will invest a further $62 million as a joint venture partner “to finance further restructuring,” after which Tesco expects that Aeon will buy out the remaining 50% share later this year, a Tesco spokesman told SN.
"This will allow for an orderly, staged exit," the spokesman said, noting that the gradual transfer would be in the best interest of Tesco's approximately 1,000 employees in the country.
2012 SN Top 25 Global Retailers:
Tesco Is Ranked No. 3; Aeon Is No. 13
Tesco had previously disclosed that it planned to exit Japan. The company entered the market in 2003 and currently has about 120 stores. It generated sales of about $740 million in 2010, according to reports. “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," said Philip Clarke, chief executive officer of Tesco, said in a statement.