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Tesco Acquires South Korean Discount Chain
May 16, 2008

London-based Tesco PLC announced the acquisition, subject to the usual regulatory approvals, of 36 Homever stores in South Korea from the E-Land Group for $1.86 billion, including existing debt. 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. Twenty-one 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 year. The acquisition, Tesco's largest single acquisition to date, and conversion of the large hypermarkets, 20 of which are in the Greater Seoul and Gyeonggi metropolitan area, will strengthen Homeplus' position in the market. According to Tesco, the introduction of the stronger Homeplus format will drive sales and deliver synergies for the combined business. "After nine years of successful development in South Korea, Tesco is now a substantial business and our leading international operation," said Terry Leahy, CEO 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 and deliver a much stronger offer for customers as we convert the stores to Homeplus." Tesco now has 66 Homeplus hypermarkets and 72 Homeplus Express stores throughout South Korea.

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