British retail giant Tesco Thursday announced it has completed the formation of a joint venture with China Resources Enterprise (CRE) to create a leading multi-format retailer in China.

The joint venture will combine Tesco China's 134 stores with CRE's almost 3,000 stores. Tesco will own 20 percent of the joint venture and CRE will hold 80 percent of the stake.

Tesco said the joint venture combines its retail practices, international sourcing and multichannel capabilities with CRE's strong local knowledge and brand.

"The partnership creates a strong platform in one of the world's largest markets," said Philip Clarke, CEO of Tesco, "we can now combine our strengths to build a profitable multichannel business, offering our customers in China the best of modern retail."

On his part, Hong Jie, CEO of China Resources Enterprise said he believes the new partnership will reinforced the strength of the two parties and "enables the joint venture to become the leading multi-format retailer in Greater China, through improved operations, better growth and enhanced profitability."

Retail Analysis IGD said China is the world's biggest market for food and groceries, estimating its market will increase by 50 percent in the next three years.

Tesco, a British multinational grocery and general merchandise retailer, owns over 500,000 staff in 12 markets. Tesco entered the Chinese market in 2004.