2.5 billion yuan, Tesco China sells China Resources Group.
Tesco will bid farewell to the Chinese market.
European supermarket giant Tesco PLC (TSCO.L) said on Tuesday that in order to further streamline and focus on its core business, it sold its stake in its Chinese joint venture company Gain Land to partner China Resources Group for 275 million pounds, about That’s 2.5 billion yuan. The transaction will be completed by the end of this month.
All this seems to have been doomed since Tesco’s Chinese stores were renamed to China Resources Vanguard.
In October 2013, China Resources Ventures announced a merger with Tesco China and established a joint venture company, Gain Land, to operate retail businesses such as hypermarkets, supermarkets, convenience stores, cash-on-demand shipping businesses, and liquor monopoly stores, each accounting for 80 % And 20% equity. Shortly thereafter, all Tesco’s more than 130 stores in China were renamed China Resources Vanguard.
At the time, this behavior was generally interpreted as: Tesco, a European supermarket giant, is no longer in love and has sought to withdraw from the Chinese market.
Compared to Carrefour and Wal-Mart, who came to China in the 1990s, Tesco started the business in the Chinese market too late and missed the best period of expansion. It is not flexible enough in terms of localization, location and business model, and it is always difficult to become a top player in the Chinese market.
In the following years, Tesco’s Asian journey was not smooth.
Following Tesco’s sale of its Japanese business, in 2015, Tesco under Dave Lewis sold the South Korean Homeplus business for £ 4.24 billion; the Malaysian market has only 74 stores since 2002. At the end of 2019, according to the Wall Street Journal, Tesco is considering selling its supermarket operations in Thailand and Malaysia. The transaction may be as high as $ 9 billion.
In recent years, with the development of the domestic e-commerce industry and the rise of China’s local business super-brands, multinational supermarket giants have been “not convinced” in China. In 2019, French supermarket giant Carrefour SA (CA.PA) announced the sale of a controlling stake in the Chinese business. Suning Easy Buy acquired an 80% stake in Carrefour China for approximately RMB 4.8 billion; also last year, German supermarket giant Metro Metro AG (B4B.DE) sold a majority stake in its China operations to Wumart (01025.HK) for $ 2.1 billion.
After the transaction was announced, Bernstein analyzedBruno Monteyne expects Tesco to launch a £ 1 billion share buyback program in its 2020-21 fiscal year.