Grocery giant Tesco unveiled its biggest ever deal today after agreeing to spend nearly £1bn (€1.25bn) on beefing up its hypermarket presence in South Korea.
The retailer has bought 36 Homever hypermarkets in the country for £958m (€1.2bn), extending the number of outlets in the country by a quarter.
It will see Tesco, which operates in South Korea as Samsung Tesco, rebrand most of the stores to its Homeplus format over the next 12 months. Most of the stores acquired were formerly operated as Carrefour premises.
Tesco has been operating in South Korea since 1999. As well as the stores just bought, it has 66 Homeplus hypermarkets and 72 Homeplus Express stores in the country, employing nearly 13,000 people. Sales in the year to February 2008 were £2.7bn (€3.4bn).
Twenty of the new hypermarkets are in the Greater Seoul and Gyeonggi metropolitan area, which has a population of around 11 million people.
Tesco 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.”
South Korean electronics giant Samsung holds a 5% stake in Samsung Tesco.
SH Lee, president and chief executive 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.”
Tesco operates 814 stores in Asia, including China, Japan, Malaysia, South Korea and Thailand.
Its worldwide empire of stores numbers 3,729 – 2,114 of which are in the UK.