Tesco PLC (LON:TSCO) and Carrefour expect their previously announced strategic alliance to become operational in October.
The supermarket groups last month said they planned to form a joint purchasing alliance in an effort to cut costs and bring down prices for customers.
READ: Tesco and Carrefour announce strategic alliance to cut costs and prices
The deal will allow the two to negotiate better terms from suppliers such as Procter & Gamble, Nestle and Unilever plc (LON:ULVR).
Tesco’s tie-up with French counterpart Carrefour comes at a time when supermarkets in the UK have been losing market share to discounters Aldi and Lidl while at the same time coming under pressure from higher cost inflation.
"Shore Capital retains a 'somewhat to be convinced' view of the demonstrable benefits of retail alliances, we also reiterate our 'buy' stance on Tesco's shares, this work stream does not offer much downside, with the scope for potential plus signs should progress emerge," Shore Capital said in a note to investors.
Tesco's shares edged up 0.4% to 260.60p in morning trading.