Tesco sells off Korean arm

SUPERMARKET chain Tesco is in the process of selling its Korean business to Asianfocused private equity firm MBK Partners in a £4bn-plus deal.

The sale is the first major disposal by Tesco as it tries to combat falling sales.

Tesco has been struggling to cope with market share losses to discount chains including Aldi and Lidl, changing shopping habits and an accounting scandal last year. Its credit rating was cut to ‘junk’ status by Moody’s and S&P in January.

Under chief executive Dave Lewis, who joined last year from Unilever, Tesco (down 0.55p to 184.85p) has been reviewing its sprawling business empire to sell unwanted parts to concentrate on improving its core UK business.

The sale of the Korean business, called Homeplus, will help it to cut debt.

It is also looking to sell data analysis business Dunnhumby.

Seoul-based MBK, one of the largest Asiabased private equity firms, beat interest from investment firms Affinity Equity Partners, KKR and Carlyle Group.

MBK is said to be in a joint venture with Singapore state investor Temasek and is seeking funds from South Korea’s National Pension Service.