SEOUL, South Korea (AP) — British retailer Tesco PLC agreed Monday to sell its South Korean retail business to a locally led consortium in a deal worth about $6 billion.
The acquisition by South Korean private equity firm MBK Partners and a group of Canadian and Singaporean investors is the largest ever in South Korea and one of the biggest deals in Asia so far this year.
Tesco said it will use the 4 billion pounds ($6.1 billion) of cash proceeds from the sale to reduce its debt, which amounts to 4.2 billion pounds. The deal is expected to be completed during the final quarter of this year, pending shareholder approval from Tesco and South Korean government approval.
Homeplus is South Korea's second-largest retailer. Its chains of discount stores generated annual revenue of 8.6 trillion won ($7.1 billion) through February with 788 billion won earnings before interest, taxes, depreciation and amortization.
Two Canadian pension funds and Singapore state investment company Temasek are part of the consortium. The MBK-led consortium said it will invest 1 trillion won in Homeplus over the next two years.
Tesco, which reported a full-year loss of $8.5 billion through February, has been restructuring its businesses. It closed 43 unprofitable stores in April.
Homeplus, meanwhile, is facing criminal and civil lawsuits in South Korea. Company executives were charged in February for selling the personal data of millions of customers to insurance companies, which used the information for marketing.