Tesco has been building an international operation of considerable scale as it seeks to offset slowing market conditions in the UK and challenge the likes of Carrefour and Wal-Mart in the international arena. Tesco is now set to challenge South Korea's largest retailer, E-Mart, for market leadership with the purchase of 36 Homever stores for €1.2 billion - the retailer's biggest ever acquisition.

The transaction brings to an end an unhappy association between E-Land and Homever. E-Land bought Korea's fourth biggest discounter back in 2006 from French retailer Carrefour. Tesco entered Korea in 1999 and the country is now its most profitable overseas market.

The retailer's latest purchase marks a new chapter in Tesco's foreign policy, which has typically focused on organic growth, with only a number of small acquisitions in Poland and Malaysia boosting its presence. This acquisition adds 270,000m2 of floor space, predominantly in the Greater Seoul and Gyeonggi regions.

With Tesco's financial muscle behind it, and the recently published findings from the UK's Competition Commission threatening to hinder its expansion at home, further international acquisitions almost inevitable. Tesco has already outlined plans to generate more than 50% of group sales from outside the UK, with both Russia and India on the radar for future investments.