Tesco has announced the acquisition, subject to the usual regulatory approvals, of 36 Homever stores in South Korea from the E-Land Group, for a total consideration of £958 million, including existing debt.

The stores, most of which were formerly Carrefour hypermarkets, have a total sales area of 3.0 million square feet, plus a further 1.3 million square feet of adjacent shopping mall space. 21 of the stores are freehold or ground leases and the remaining 15 are leasehold. Most of the stores will be converted to the Homeplus format over the next twelve months.

The acquisition and conversion of these large hypermarkets, twenty of which are in the Greater Seoul and Gyeonggi metropolitan area, will strengthen Homeplus' position in the market. The introduction of the stronger Homeplus format will drive sales and deliver synergies for the combined business and it is expected that the acquisition will be broadly earnings neutral in the second year after acquisition, and enhancing thereafter.

Terry Leahy, Chief Executive of Tesco, commented: '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.'
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