JAPAN: Tesco prepares Japan exit with Aeon JV
By Katy Askew | 18 June 2012
- Tesco plans phased exit of Japanese market
- Aeon will take 50% of Tesco Japan
- Tesco to invest GBP40m in JV prior to full withdrawal
 |
Tesco details Japan exit strategy |
Tesco has confirmed details of its planned withdrawal from the Japanese market, which was initially announced last year.
Through its formation of a joint venture with Japanese retailer Aeon, the company will gradually hand over control of its Japanese operations. The deal allows Tesco to cap its exposure to Japan with the agreed investment of GBP40m (US$62.7m) to restructure operations.
While Tesco does not publish earnings details for individual countries, it is believed the unit is loss-making and analysts have estimated the group made a loss in the region of GBP11m in fiscal 2011.
The move is a reflection of the difficulties associated with retailing in Japan: the highly-competitive, well-developed retail landscape has been shaped by poor consumer sentiment and a bleak economic landscape for a number of years and retailers have seen sales stagnate as a consequence.
Click here for further comment from Tesco and the thoughts of Shore Capital analyst Clive Black on the move.
TESCO ANNOUNCES DEAL WITH AEON IN JAPAN
18th June 2012
In line with its previous announcement, Tesco has today entered into an agreement with Aeon, Japan's largest retail group.
Tesco will exit Japan in a two stage process. In the first phase Tesco will sell 50% of its shares in Tesco Japan to Aeon for a nominal sum. This will result in the formation of a joint venture with Aeon. As part of this, Tesco will invest a further c.£40m as a joint venture partner to finance further restructuring, after which Tesco will have no further financial exposure to the Japanese business or its operations.
Philip Clarke, Chief Executive Officer of Tesco Plc, said: "I thank our colleagues in Japan, who have done an excellent job for the business - in particular over recent months. 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."
Completion of this transaction is subject to usual regulatory approval.
Original source: http://www.tescoplc.com/index.asp?pageid=17&newsid=650
Sectors: Mergers & acquisitions, Retail
View next/previous articles
18 Jun 2012 -
18 Jun 2012 -
Currently reading -
JAPAN: Tesco prepares Japan exit with Aeon JV
18 Jun 2012 -
Related research
Tesco in the Czech Republic: Local Profile
This is a detailed report covering Tesco’s store formats, private labels, history, key employees, and key financial and operational metrics in the Czech Republic...
Tesco in Turkey: Local Profile
This is a detailed report covering Tesco’s store formats, private labels, history, key employees, and key financial and operational metrics in Turkey....
Tesco PLC (TSCO) - Financial and Strategic SWOT Analysis Review
Tesco Plc (Tesco) is an in-store and online retailer. The company undertakes operations of 4,811 multi-format stores including stores which are classified into six formats, differentiated by size and the range of products sold, they are, Homeplus, Su...
Related articles
Quote, unquote: just-food's week in words
Barry Callebaut CEO Juergen Steinemann last week insisted its acquisition of Petra Foods' cocoa ingredients unit will strengthen its future with the deal making it the world's largest processor of cocoa and high-quality cocoa powder. Elsewhere, the European Commission said it would come forward with ideas for a grocery code adjudicator by next autumn if no system of self-regulation is put into place. Parmalat, meanwhile, confirmed a raid on its offices over tax investigations, and David Heath, UK minister for environment, food and rural affairs said his department was working with the UK Government to identify export priority markets.
Editor's choice: the highlights on just-food last week
The top two stories on just-food's pages last week included Barry Callebaut's deal to buy Petra Foods' cocoa ingredients business and the European Commission's warning it will come forward with ideas for a grocery code adjudicator next autumn if no system of self-regulation is in place. Elsewhere, there has been a focus on the dairy sector with FrieslandCampina announcing plans to cut over 200 jobs across its business in Germany, and Parmalat having had its offices raided by Italy's financial police over an investigation into tax. We also brought you news from the FDEA's UK export event in London where just-food was an exclusive partner.
There are currently no comments on this article
Be the first to comment on this article