Tesco expands in South Korea
Tesco chief executive Terry Leahy said its South Korean acquisition is an important strategic move
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Wednesday, 14, May 2008 01:23
Tesco has made its biggest single acquisition by buying 36 Homever stores in South Korea for £958 million.
Tesco bought the stores from E-Land Group, which in turn bought them from French grocer Carrefour, and intends to convert most of them into its Homeplus format.
The supermarket chain, which operates in South Korea as Samsung Tesco, now has 66 Homeplus hypermarkets and 72 Homeplus Express stores throughout the country.
In its results for last year, released in February, Tesco said it plans to open over 11.5 million square feet of new group space this year, with 80 per cent of it outside the UK.
Tesco's international division now contributes half of the company's trading profits.
The Homever stores will contribute three million square feet, plus another 1.3 million square feet of adjacent shopping mall space to this target, the UK's largest retailer said.
Tesco's chief executive Terry Leahy 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."
Tesco shares fell 0.97 per cent on the FTSE 100 in morning trading.