The UK's leading retailer Tesco has reportedly gained approval from the Malaysian government for its purchase of Thai retailer Makro's cash and carry operations in the country.

The deal, for eight Makro stores, is now expected to be completed next month.

The Malaysian government's Minister of Domestic Trade and Consumer Affairs, Datuk Mohd Shafie Apdal, told local press he thought the takeover would create added value, and that Tesco's confidence to expand in Malaysia shows that international hypermarket chains were responding positively to a healthy Malaysian consumer sector there.

Tesco said in its trading statement this month that international sales in the third quarter increased by 17.9% at constant exchange rates, and by 17.5% at actual rates.

During the second half of Tesco's financial year, the retailer plans to open over 300 stores abroad, representing its largest ever overseas expansion.

Last month, however, it was pipped to the post by US giant Wal-Mart, which snapped up a joint venture with Indian business group Bharti Enterprises.