UK retail giant Tesco and French rival Carrefour have announced an asset swap involving stores and operations in the Czech Republic, Slovakia and Taiwan, subject to the usual regulatory approvals.

As part of the deal, 11 Carrefour stores in the Czech Republic and four stores in Slovakia will be transferred to Tesco for a combined enterprise value of €189.4m (US$228.2m). In return, Carrefour will receive six Tesco stores and two sites in Taiwan, for an enterprise value of €132m. This is part of a strategic move by Tesco to strengthen its businesses in Central Europe.

The swap provides Tesco with the opportunity to grow its businesses in the highly competitive Czech and Slovak markets and exit the Taiwanese market where it is lacking critical size.

"This is a positive strategic move for Tesco which will allow us to focus on doing an even better job for customers in Central Europe and our other Asian markets," said Andrew Higginson, Tesco group finance and strategy director.

Tesco entered the Czech Republic and Slovakia in 1996 through the acquisition of six department stores in the Czech Republic and five in Slovakia. Since then, Tesco has concentrated on opening new stores in three formats - hypermarkets, compact hypermarkets and small stores. Tesco operates a total of 25 stores the Czech Republic and 30 stores in Slovakia.

Carrefour said the acquisition strengthens its position in Taiwan where it will operate over 40 hypermarkets in 2006.