Tesco front runner in South Korea expansion dash
Supermarket giant Tesco is poised to expand its presence in South Korea after making it on to the final shortlist to buy French group Carrefour’s stores in the country.
The UK supermarket is reported to be one of four companies that are still in the running for Carrefour’s 32 stores in South Korea, thought to be valued at between £870m (€1.26bn) and £1.1bn (€1.6bn), newspapers said today.
Tesco is bidding for the chain through Samsung Tesco, a joint venture in which it holds an 89% stake, with this due to increase to 99% in July next year.
The group already has 55 stores in the country, which trade as Home-plus, making it the second largest player in the sector.
Other firms still said to be in the running for the Carrefour stores are South Korean retailers Lotte Shopping and Shinsegae, and clothing group E-Land. Samsung Tesco and Lotte are reported to be the front runners.
Carrefour, which is understood to be selling the stores so that it can concentrate on expanding in China, said it had started talks with the companies about terms and conditions, and would provide further details next week.
If Tesco succeeds in buying the 32 South Korean stores it will become the country’s biggest supermarket chain.
Tesco declined to comment on whether it was bidding for the stores.
But a spokeswoman said: “Korea is a big, important market for us. We have a good business there, with a strong local team, and are expanding into different formats, such as Tesco Express.”
Tesco has rapidly expanded its overseas presence in recent years, and now has around 650 stores in 13 countries.
It is rumoured to be considering moving into the Indian market, and it recently announced plans to launch a convenience store chain in the United States, with its first store opening on the West Coast next year.
The supermarket giant recently saw its shares hit a record high following reports that it planned to unlock more value from its £12bn (€17.4bn) property empire.
Tesco was said to be considering putting its freehold assets into a Real Estate Investment Trust. The trusts are due to be introduced from next January.
It would sell shares in the trust and use the money raised to buy back its own stock.
