Tesco is selling this one unit for £4.2 billion
Reuters
It said in a regulatory statement that it will receive £4 billion ($6.1 billion) in cash through the proposed sale to the investment group MBK Partners and will cut its net debt by £4.225 billion ($6.4 billion).
MBK Partners leads a consortium of other investors which include Canada Pension Plan Investment Board, Public Sector Pension Investment Board, and Temasek Holding.
"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," said Dave Lewis, Chief Executive of Tesco.
"I am confident that the agreement we have reached with MBK Partners presents an exciting opportunity for their continued success."
This sell-off falls neatly in line with CEO Dave Lewis's strategy in turning around the business. Lewis, who took over as CEO from Philip Clarke in September 2014, is trying to sell-off various units, cut costs and overhaul its management after the group reported a £250 million ($400 million) profit error in its results last year.
Tesco is also trying to claw back its UK market share. While it still dominates Britain's supermarket scene, it is consistently losing market share to upstart budget grocers; Aldi and Lidl.
Researchers Kantar Worldpanel said, as of August 16, Tesco had 28.3% of the UK supermarket sector. However, this is down from 30.6% market share from the end of 2012.
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