Seoul, April 4 - The South Korean unit of Britain's Tesco and clothing firm, E-Land Ltd., submitted bids on Tuesday for the local outlets of Carrefour, in a deal valued by analysts at about 1.8 trillion won ($1.86 billion).
Carrefour, the world's second-largest retailer, is selling its 32 discount stores in South Korea, because of their relative underperformance against local rivals and as it seeks to expand in China, Asia's largest retail market after Japan.
The planned sale also follows the French retailer's exit from Japan in March last year, when it sold its eight stores to top Asian retailer Aeon Co. due to weak consumer spending and fierce competition.
The deal could become the second-largest acquisition in South Korea this year after Kookmin Bank agreed in March to pay $6.6 billion for a 64.6 percent stake in Korea Exchange Bank (KEB)
Officials at Tesco and E-Land, a South Korean clothing company, confirmed by telephone that the firms had submitted letters of intent, but did not say how much they were offering for the Carrefour outlets.
Carrefour, whose warehouse-style stores have failed to win over South Koreans, is focusing resources into China's $240 billion retail market, which is growing more than 10 percent annually.
Lotte Shopping Co., South Korea's top retailer, and rival Shinsegae Co. Ltd. are also expected to submit letters of intent on Tuesday.
Samsung Tesco, 89 percent owned by the British grocery giant, runs South Korea's second-largest discount store chain with 42 Home-plus stores, trailing Shinsegae's E-Mart.
The retailers are seeking a bigger scale in South Korea's $120 billion retail industry as stiff competition erodes margins.
A spokesman at Wal-Mart stores Inc., the world's largest retailer which operates 16 stores in South Korea, declined to comment whether it would also bid for the Carrefour stores. The company had previously expressed interest in bidding.
Carrefour's PR agency Saram & Image said the French firm would likely hold a media briefing on the sale process this week.
Industry watchers expect the French firm to announce its preferred bidders as early as this week.
The French retailer earned 15.96 billion won ($16.45 million) in net profit from its South Korean operations in 2004, according to latest data.
($1=970.4 Won)