Japan's Aeon Co Ltd is interested in buying the Malaysian operations of Britain's Tesco PLC, valued at about 900 million pounds ($1.4 billion), people familiar with the matter told Reuters.

Japan's largest retailer has been venturing into Southeast Asia where purchasing power is rising in fast-growing economies. In contrast, growth has been hampered at home by deflation, sluggish consumer spending and a shrinking population. It bought the Malaysian arm of French retailer Carrefour SA in 2012 for 250 million euros ($275 million) and last year expanded e-money services in Thailand. Buying Tesco's operations would make Aeon Malaysia's biggest hypermarkets group. The Japanese retailer has 28 hypermarkets in the country and plans to open 100 more stores in various formats by 2020. Aeon also owns 51.7 percent of Aeon Co M Bhd, which has 29 outlets and four MaxValu supermarkets in Malaysia. Tesco is currently seeking buyers for its $6 billion South Korean business and a stake in data-gathering arm Dunnhumby, to fund a turnaround in its home market.