Tesco Set For Major Expansion In South Korea

Tesco has announced a landmark deal to spend almost £1 billion on boosting its presence in South Korea .
The UK’s largest retailer has agreed to acquire 39 E-Land hypermarkets in the country for £958 million, extending the number of outlets in the country by a quarter.
The deal is the largest acquisition in Tesco’s history and comes only weeks after the Competition Commission called for tougher planning rules to be introduced to regulate the supermarket sector in Britain .
Tesco’s international director, Philip Clarke, told reporters that Korea is the retailer’s “most important market outside the UK” .
“We are second in the market,” he said. “This promotes us very close to the market leader E-Mart and gives us a number of hypermarkets in Seoul, where we haven’t had much of a presence before.”
Tesco will re-brand most of the stores to its Homeplus format, the second-largest discount chain in South Korea, over the next 12 months.
The majority of the E-Land stores purchased formerly belonged to French retailer Carrefour .
Tesco has been operating in South Korea since 1999 as Samsung Tesco. The company claims the country’s grocery market is valued at more than $100bn (£50bn) annually.
Tesco chief executive, Sir Terry Leahy, said the latest acquisition marked an important “strategic move,” allowing the firm to accelerate growth in this “key market and deliver a much stronger offer for customers”.
In addition to the newly acquired stores, Tesco currently operates 66 Homeplus hypermarkets and 72 Homeplus Express stores in the country, employing nearly 13,000 people. Sales in the year to February 2008 were £2.7 billion.

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