Seoul, South Korea Tesco has agreed to buy South Korean discount chain Homever for $1.86 billion, according to Reuters. The 36-store Homever has been plagued by poor sales and labor disputes since South Korea’s fashion retailing group E-Land bought it from French retailer Carrefour in 2006.
The deal, the largest single acquisition to date for Tesco, will give the chain a major anchor in one of its most profitable markets. The Homever stores, most of which were formerly Carrefour hypermarkets, have a total sales area of 3 million sq. ft., plus a further 1.3 million sq. ft. of adjacent shopping mall space.
"After nine years of successful development in South Korea, Tesco is now a substantial business and our leading international operation," said Sir Terry Leahy, chief executive of Tesco. "This acquisition of high-quality assets is an important strategic move, which will allow us to accelerate our growth in this key market."
Philip Clarke, international director, said the deal would allow Tesco to roll out Homeplus, its hypermarket format, into Seoul and the surrounding areas, according to U.K. newspaper reports. Tesco said it planned to convert the stores to its Homeplus format over the next 12 months.
Tesco owns 66 hypermarkets and 72 convenience stores in South Korea.