Tesco has completed its deal to form a joint venture with China Resources Enterprise to create the “leading multi-format retailer in China”.

Tesco said the JV combines its “best-in-class retail practices, international sourcing and multichannel capabilities with CRE’s strong local knowledge and brand, to create a business which is the largest food retailer in China”.

Tesco chief executive Philip Clarke said:  “We’re very pleased to have completed this historic agreement. The partnership creates a strong platform in one of the world’s largest markets. We can now combine our strengths to build a profitable multichannel business, offering our customers in China the best of modern retail.”

CRE chief executive Hong Jie said: “We are very excited about the completion of this agreement; it also marks a major milestone for our business development. We believe that this partnership is one that combines the strength of both parties and enables the JV to become the leading multi-format retailer in Greater China, through improved operations, better growth and enhanced profitability.”

Tesco takes a 20% stake in the Chinese food retailer totalling £345m. The retailer has said previously that the JV will secure significant cost and operational synergies and move it more quickly towards profitability in China.