Tesco today announced that it has gained control of Kipa, a small Turkish hypermarket chain by acquiring the necessary majorities of the unlisted A shares and listed B shares.
Tesco first signalled that it was in talks with Kipa in August 2002.
The equity capital cost of 100% of Kipa is £75m debt free (USD $124m at current exchange rates*), plus an additional payment in return for cash acquired on the balance sheet on closing. This is a cash deal. Tesco will be making a tender offer for the outstanding B shares as required by Turkish law.
Kipa operates 5 hypermarkets in the Aegean region with reported sales in 2002 of £124m, pre tax profit of £4.7m and has over 1,500 employees. Turkey has a growing population of 70 million with an underdeveloped retail market. In 2002 it had real GDP growth of 7.8% and is working towards EU accession, which will bring further economic benefits.
Terry Leahy, Chief Executive, said, "The acquisition of Kipa is an important step in our international strategy for long term growth. It is a great opportunity and an ideal entry vehicle: Kipa has a small and profitable chain of hypermarkets operating in a growing market. We will be working with existing management and three of the current Kipa directors to serve Turkish customers even better."
