Analysts say Australia is not a priority
Tesco will not make a bid for Coles, according to Australian wire reports, which cited concern over the investment required to turn around Australia's second-largest retailer.
The grocer had brought in Merrill Lynch to advise on the purchase, but has now decided not to proceed to the due diligence stage, the reports said, quoting unnamed sources.
Analysts had speculated that Australia was not a high priority for Tesco when compared with the US, mainland Europe and India.
Meanwhile, The Business reported that Tesco is prepared to invest as much as£1.5 billion in its move into North America, where it plans to open 200 Fresh & Easy convenience stores, starting this year.
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