Supermarket giant Tesco has bought 36 Homever stores in South Korea today for £958m including existing debt as it seeks to further consolidate its position in the country.
Tesco’s Korean operation Samsung Tesco bought the stores, most of which are located in the Greater Seoul and Gyeonggi metropolitan areas, from the E-Land Group.
The stores, which were former Carrefour hypermarkets, have a total sales area of 3m sq ft with an additional 1.3m sq ft of shopping mall space. Tesco has bought the freehold or ground lease of 21 of the stores while the remaining 15 are held on long leaseholds.
Tesco said most of the stores will be converted to the Homeplus format over the next 12 month which will strengthen Homeplus’ position in the market. Samsung Tesco was established in 1999 and now has 66 Homeplus hypermarkets and 72 Homeplus Express stores throughout South Korea, employing nearly 13,000 people. Its sales in the year to February 2008 were £2.7bn.
Sir Terry Leahy, chief executive of Tesco, said: ‘After nine years of successful development in South Korea, Samsung Tesco is now a substantial business and our leading international operation. 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. It also demonstrates our continued commitment to invest into South Korea.'
SH Lee, president and CEO of Samsung Tesco, said: ‘This deal is good news for the Korean consumer, our employees and Homeplus. It will enable us to offer our customers a better shopping experience with improved product range, prices and services. We plan to integrate the businesses to create one team, providing excellent development opportunities for Homeplus and Homever staff.'