Tesco is pushing into the notoriously tough Japanese food retailing market by offering to buy a convenience-store chain for £173 million.
Tesco said it had made a recommended offer of 3,400 yen per share in cash for the C Two-Network, which operates a profitable chain of 78 stores, many of them in Tokyo. The price tag includes cash balances of £34 million.
Tesco deputy chairman Mr David Reid said the acquisition, which would enhance earnings in its first full year, was a measured first step into the highly fragmented Japanese market and said "there may be further opportunities [there] in the medium term.
"Japan is the second-biggest market in the world in terms of food retailing and has strong expenditure per head - stronger than in the UK," he said. But he added that C Two-Network was almost a rarity in being able to make a profit.
Tesco turns over around £2 billion a year from its Asian operations and will pick up another £286 million from C Two-Network Co.