Supermarket giant Tesco said on Wednesday that it acquired 36 Homever stores in South Korea from the E-Land Group for £958 million, including existing debt.

The new stores, formerly owned by Carrefour hypermarkets cover a total sales area of 3.0 million sq ft with a further 1.3 million sq ft of adjacent shopping mall space.

Out of the 36 stores, 15 are leasehold while 21 are freehold or ground leases. Tesco said that most of the new stores would be converted into the Homeplus format in the next 12 months.

Tesco said that the new acquisitions would strengthen the position of Homeplus in the market. The company said it believed the acquisitions would be earnings neutral in the second year after acquisition but would make a profit after that.

Terry Leahy, chief executive of Tesco, said, After nine years of successful development in South Korea, Samsung Tesco is now a substantial business and our leading international operation. 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. It also demonstrates our continued commitment to invest into South Korea.

SH Lee, president and CEO of Samsung Tesco, said, This deal is good news for the Korean consumer, our employees and Homeplus. It will enable us to offer our customers a better shopping experience with improved product range, prices and services. We plan to integrate the businesses to create one team, providing excellent development opportunities for Homeplus and Homever staff.