The retailers have announced plans to enter into a long term strategic alliance after two years of talks
Tesco and Carrefour are set to enter into a long-term strategic alliance that they say will result in "even lower prices" for consumers.
Through the partnership, the companies say they will improve the quality and choice of products, while strengthening relationships with and creating "significant opportunities" for suppliers.
It will cover the strategic relationship with global suppliers, the joint purchasing of own brand products and goods not for resale, and be governed by a three-year operational framework.
While a deal has not yet been finalised, a formal agreement is anticipated within the next two months.
Last year, Tesco generated sales of £57.5bn and profits of £1.3bn.
The figures represent a marked turnaround since the retailer reported a historic annual loss of £6.4bn in 2014, coupled with thousands of job losses and the closure of stores.
Over the past few years the retailer has been taking steps to improve its customer experience with a focus on affordability; in June it scrapped its Brand Guarantee scheme in favour of lower everyday prices.
Dave Lewis, Tesco Group Chief Executive, said: “I’m delighted to be entering into a strategic alliance with Carrefour.
"By working together and making the most of our collective product expertise and sourcing capability, we will be able to serve our customers even better, further improving choice, quality and value.”
Carrefour is Europe's largest retailer, operating 12,300 stores in more than 30 countries.
In fiscal 2017 it reported sales of €88.2bn (£78bn).
Alexandre Bompard, Chairman and CEO of Carrefour Group, said: “This strategic alliance between Carrefour and Tesco is a major agreement as it combines the purchasing expertise of two world leaders, complementary in their geographies, with common strategies.
"This agreement is a great opportunity to develop our two brands at the service of our customers.
"This international alliance further strengthens Carrefour allowing it to reach a key milestone in the implementation of its strategy.”