Britain's biggest supermarket Tesco enters China's mainland

Britain's largest supermarket chain Tesco announced Wednesday it had signed an agreement with retail chain Ting Hsin International Group to buy 50 percent of shares of its Hymall chain of hypermarkets, marking its first expansion into the Chinese mainland markets.

Tesco said it would acquire 50 percent of equity in Ting Hsin's Hymall chain of stores for 140 million pounds (260 million US dollars) cash, valuing the whole business at 280 million pounds (519 million dollars).

The transaction was expected to be completed within four months, Tesco said in a statement to the London Stock Exchange.

"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.

"We believe Ting Hsin is the right partner and Hymall is the right store chain for our strategic move into this exciting market," he added.

Tesco, which operates 2,318 stores around the world, currently has a presence in 12 countries and regions including South Korea, China's Taiwan, Thailand, Malaysia and Japan.

It announced in April plans to open more than 100 new stores overseas and create 20,000 jobs worldwide next year. The company has about 23.5 percent of the British retail grocery market.

Hymall opened its first outlet in September 1998 and is now one of the leading hypermarket operators in China, with French chain Carrefour and US-owned Wal-Mart among its rivals.

Hymall now operates a chain of 25 hypermarkets in China's mainland, including 10 in Shanghai, and plans to open up to 10 more stores in the coming year.

Tesco said that combining their talents, Ting Hsin will offer its local knowledge and operating expertise, while Tesco will add its supply chain, product development and store operation prowess to "improve the shopping experience."