LONDON (Reuters) - Britain's Tesco (>> Tesco PLC) has sealed a joint venture agreement with a unit of India's Tata Group that will see it invest $140 million and become the first foreign supermarket to enter the country's $500 billion pounds retail sector.
Tesco said on Friday that following receipt of approval from the Indian Foreign Investment Promotion Board, it has entered into a deal with Trent Limited (>> Trent Ltd) to form a 50:50 joint venture with the operator of the Star Bazaar retail business, Trent Hypermarket Limited (THL).
The world's third-largest retailer, which since 2008 has had a franchise agreement to provide support to Star Bazaar, had made the application to India's FIPB in December.
On completion of the transaction THL will operate 12 stores retailing a range of merchandise including food and grocery, personal and home care products, home and kitchen, fashion and accessories.
The stores are operated under the 'Star Bazaar' and 'Star Daily' banners, and spread across the southern and western regions of India. ($1 = 0.6057 British Pounds)
(Reporting by James Davey; editing by Kate Holton)