British retailer Tesco Plc is looking to acquire 50% stake in Trent Hypermarkets Ltd, the hypermarket business owned by the Indian conglomerate Tata for $110m, in a bid to gain foothold in India.
Tesco Overseas Investment Ltd has already submitted an investment proposal to the Indian government on 17 December.
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If the transaction is successful, Tesco will become the first foreign chain to invest in supermarkets in India since the government allowed FDI in the retail sector in 2012.
Trent Hypermarkets operates a chain of 16 Star Bazaar hypermarkets in Maharashtra, Karnataka, Gujarat, and Tamil Nadu, reported The Economic Times.
Sources familiar with the matter reported that Tesco will not use its brand for its stores in India, and instead build on the existing portfolio of Star Bazaar stores through Tata-Tesco joint venture.
The proposed partnership will build on the existing stores in Maharashtra and Karnataka. Gujarat and Tamil Nadu have banned foreign investment in retail.
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By GlobalDataThe joint venture plans to open three to five stores every year.
It will sell various items in Star Bazaar, Star Daily and Star Market branded outlets, with a ‘A Tata and Tesco Enterprise’ tagline.
Products to be sold under 14 categories include cereals, tea, coffee, spices, flour, vegetables and fruits, meat, fish and poultry, sweetmeat, bakery and dairy products, soft drinks, ice-creams, wine and liquor, textiles, footwear, crockery, furniture and electronic equipment, among others.
