Spanish retailer Distribuidora Internacional De Alimentacion (Dia) has signed a deal with Chinese retailer Lianhua Supermarket Co to set up a joint venture to run discount stores in China.

The two companies are to invest 135m yuan (US$16.3m) in the joint venture, which will be called the Shanghai Dia Lianhua Retailing Co. The retailers plan to open around 300 discount stores in Shanghai over the next two to three years.

Dia, a unit of French retail giant Carrefour, would hold a 55% stake in the venture, while Lianhua would own the remaining share, a Dia official told Reuters.