Tesco agrees sale of Korean subsidiary in £4.2bn deal
Tesco has announced the proposed sale of its Korean business to a group of investors led by MBK Partners and including Canada Pension Plan Investment Board, Public Sector Pension Investment Board and Temasek Holdings Ltd.
The deal, which will see the retail giant dispose of Homeplus on a cash and debt free basis, allows Tesco to continue paying off its debts announced in April.
Completion is expected in Q4 2015, conditional on Tesco shareholder approval and regulatory approvals in the Republic of Korea
Dave Lewis, Chief Executive of Tesco, said: “After a highly competitive process, we are announcing today the proposed sale of Homeplus, our business in the Republic of Korea. 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.
“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. I am confident that the agreement we have reached with MBK Partners presents an exciting opportunity for their continued success.”
Earlier this year, Tesco announced £6.2bn losses as a result of increase competition in the retail market. The retailer announced the closure of 43 ‘unprofitable’ stores as well as a restructuring of its head office in an attempt the tackle the ‘difficult’ market conditions.