British retail giant Tesco agreed Friday to sell its South Korean operations to a local equity fund for 7.2 trillion won (5.98 billion dollars), the country’s largest takeover, a news report said.
It was sold to a consortium led by Seoul-based private equity firm MBK partners, Yonhap News Agency reported.
Tesco has been under pressure to relieve debt of around 21.7 billion pounds (32.9 billion dollars), which has earned it a junk credit status, according to financial news agency Bloomberg.
The move came as the won reached its lowest point in five years, falling below the threshold of 1,200 to 1,204.2 won to the dollar.
The currency was already depressed by the troubles on the Chinese and other Asian stock markets, as well as by anticipation of an upcoming rates hike in the United States, experts said.
But Tesco’s divestment may also have prompted investors to predict a further rise in demand for the dollar, said Jung Kyung Parl of KEB Futures Co, according to Yonhap News Agency.
The franchise in South Korea is operated under the brand Homeplus, and earned Tesco around 120 billion won in licensing fees between 2013 and 2015, according to Yonhap.
Homeplus has an estimated 25 per cent of the South Korean market, second to E-Mart Co with 29 per cent, Bloomberg said.