S. Korea's E.Land Acquires Carrefour Korea for US$1.57 BLN

SEOUL, Sept 28 Asia Pulse - South Korea's E.Land Corp. has signed a formal agreement with Carrefour SA to acquire the French retailer's South Korean unit for 1.48 trillion won (US$1.57 billion), a lower price than was initially agreed upon, the head of E.Land said Thursday.

Carrefour selected E.Land, a clothing company, as the buyer of Carrefour Korea Ltd., the nation's No. 4 discount store chain, in April.

The French retailer, which entered the local market in 1996, had sought to sell all 36 of its local stores for 1.75 trillion won and exit the country due to lackluster performance.

"After a close inspection of the discount store chain, the final purchase price has significantly gone down," E.Land President Kwon Moon-soon said at a press briefing marking the completion of the acquisition.

For the purchase, E.Land's affiliates E.Land World Ltd. and New Core Ltd., and five other companies financed 610 billion won.

Kookmin Bank (KSE:060000), South Korea's top lender, and Woori Bank, the flagship of the country's second-largest financial service company Woori Finance Holdings Co. (KSE:053000), made a combined loan of 800 billion won, Kwon said.

E.Land World and New Core together hold a controlling stake of 50.9 per cent in E.Land Retail Ltd., the operating unit of former Carrefour Korea stores, Kwon said.

Separately, E.Land accepted the country's antitrust watchdog's order to sell three stores in as many designated areas within six months from the point of completing the takeover in a bid to prevent a de facto monopoly, according to Kwon.

Since the Fair Trade Commission granted a grace period of 18 months for the sale, E.Land will not rush to sell the stores, he added.

Now renamed as Homever, the discount store chain's target is 3.5 trillion won in sales next year and 7 trillion won in 2010.

Carrefour Korea's annual revenue amounted to 1.7 trillion won last year. It aims to operate 60 stores nationwide four years from now, the company said in a statement Wednesday.

E.Land's business portfolio comprises 32 discount stores, 24 clothing outlets, two department stores and 32 supermarkets, according to the company. It posted 2.7 trillion won in revenue last year.

(Yonhap)

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