HONG KONG (AP) — Britain's Tesco is contributing $558 million and 134 stores to set up a supermarket joint venture with a state-owned company in China, where it has struggled to make money.
The British supermarket giant said on Wednesday that it's teaming up with China Resources Enterprises.
Tesco will combine its Chinese stores and shopping mall business with China Resources' 2,986 stores.
Tesco will pay China Resources a total of 4.325 billion Hong Kong dollars ($558 million) for a 20 percent stake in the joint venture. It has an option for an additional 5 percent five years after the deal is done.
The deal is expected to close in the first half of 2014.
Revenue at the new business is expected to be nearly 10 billion pounds ($16 billion) a year.