Tesco expands South Korean presence
Supermarket titan Tesco has expanded its presence in South Korea with the acquisition of 36 Homever hypermarkets.
Tesco is paying £958m, including existing debt, to E-Land Group for 36 Homever stores, most of which were once Carrefour hypermarkets.
The stores have a total sales area of 3m square feet, plus an additional 1.3m square feet of adjacent shopping centre space.
Of the 36 stores, 21 are freehold or have ground leases while the remainder are leasehold.
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Tesco plans to convert the stores to the Homeplus format over the next 12 months.
It is expected that the acquisition will have a minimal net effect on earnings in the second year after acquisition and thereafter should be earnings enhancing.
"After nine years of successful development in South Korea, Samsung Tesco is now a substantial business and our leading international operation," said Terry Leahy, Tesco's chief executive.
"This acquisition of high quality assets is an important strategic move, which will allow us to accelerate our growth in this key market and deliver a much stronger offer for customers as we convert the stores to Homeplus," Leahy added.
