C Two Network, the Japanese subsidiary of UK supermarket group Tesco, has announced plans to acquire the neighbourhood supermarket business of Fre’c, a privately owned Japanese company.
Tesco said the transaction is being co-ordinated by the Industrial Revitalisation Corporation of Japan (IRCJ), and is conditional upon successful restructuring of Fre’c’s debt with the IRCJ’s support.
C Two Network has been appointed by the IRCJ to sponsor the rehabilitation of Fre’c, which operates mainly in the Greater Tokyo area. The proposed transaction will take the form of a demerger of Fre’c’s supermarket business of 27 stores and related assets into C Two, which will assume net debt of approximately ¥3.0bn (US$27.5m).
The process is expected to be completed in August 2004 and will be funded from C Two’s existing financial resources.
Tesco acquired C Two in July 2003. The company now controls 77 profitable stores mainly in the Tokyo metropolitan area.
Fre’c (“Fresh and Cost”) is a regional privately owned Japanese company with particular strength in fresh food. In the year ending March 2003 sales were ¥28bn.