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Alan Giles

By Alan Giles

Tesco expand in South Korea

Tesco has announced that it is acquiring South Korea’s `Homever’ chain for £958m, which incorporates the old Carrefour stores bought by E.Land in 2006. This involves 36 new stores to integrate, which are marginally profitable (but, in a built-up area such as South Korea, organic growth is more difficult so still huge value in the sites). Lehman’s view is that this will propel Tesco to market leader alongside E.Mart, and add scale in a market which is already the second most profitable for Tesco (c.5.7% margin), with market share increasing from 25% to c.35% and synergies to come.

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