Troubled supermarket Tesco is exploring the possibility of spinning off its South Korean operations with banking giant HSBC, as it moves towards offloading its Asian assets.
There has been growing speculation that CEO Dave Lewis could divest its South Korean arm to fund an aggressive turnaround of the UK.
It is understood that the Asian business has been put under review so that Tesco can concentrate on its core UK grocery market which has been ailing amidst intensifying price competition between Tesco, Sainsbury’s, Asda, Morrisons and German discounters Aldi and Lidl.
According to Reuters, industry sources have said that the South Korean operations could be valued at around £3.8bn.
In 2008 then CEO Terry Leahy targeted South Korea as an prominent area for growth and put in motion an expansion plan that cost almost £1bn.
South Korea is Tesco’s largest business outside Britain, with more than 400 stores, 500 franchise stores and more than 6m customers a week. The division has attracted several bid enquiries in the past, which has encouraged Tesco to explore a formal sale process, the sources said.