UK retail giant Tesco has sold its South Korean operations to a consortium led by MBK Partners for £4.2bn (US$6.42bn).
The sale of its Korean Homeplus stores, Tesco’s largest overseas asset, was announced on 7 September in a move to reduce Tesco’s debt and refocus on its UK-based operations.
Led by Asian private equity firm MBK Partners, the consoritum included the Canada Pension Plan Investment Board, Public Sector Pension Investment Board and Singapore’s Temasek Holdings.
“This sale realises material value for shareholders and allows us to make significant progress on our strategic priority of protecting and strengthening our balance sheet,” Dave Lewis, Tesco CEO said in a company statement. “I would like to thank all of our Homeplus colleagues for their dedication, professionalism and service to our customers, which has resulted in the creation of a great business.”
Tesco exited Japan in 2012 after failing to grow its business there, and withdrew its US venture Fresh & Easy the following year, and in 2014 finalised a joint venture with China Resources Enterprise which saw the Chinese firm buy a majority stake rebrand the Tesco China stores in February 2015.
Lewis said the bid had been a highly competitive process, with completion of the sale expected in the fourth quarter of this year, subject to shareholder approval and regulatory approval in Korea.
The Homeplus Group has expanded to include 140 hypermarkets, 609 supermarkets and 326 convenience stores across Korea since being established in 1999.