Acquisition

Tesco PLC
4 July 2002


                      TESCO ACQUIRES HIT 'CHAIN' IN POLAND


The Board of Tesco announces that it is acquiring HIT, a leading hypermarket
business in Poland from HIT Germany. HIT operates a national chain of 13
hypermarkets across Poland. The deal includes a further 2 stores under
construction and a number of sites suitable for hypermarket development. HIT is
a profitable business with sales in the year to the end of December 2001 of
£337m. As at 31 December 2001, prior to fair value adjustments, the HIT business
had net assets of £17m including net debt of £83m.


Tesco already operates a profitable business in Poland with 47 stores including
15 hypermarkets and a total turnover of nearly £390m to the last year end.
Combining the two businesses will significantly enhance our profile in Poland
and will bring Tesco range, value and service to even more customers.


The acquisition is being financed out of normal Group funding and we expect it
to enhance Group earnings in its first full year, 2003/4. We also look forward
to the potential economic benefit of Poland joining the EU around 2004.


Tesco Deputy Chairman, David Reid, said:

'Tesco is delighted to acquire the HIT business, whose modern hypermarkets
complement our existing store network. This is an excellent strategic
acquisition, creating a business with 28 hypermarkets, 32 small supermarkets and
a number of sites. Our International Strategy is to build businesses of scale
wherever we operate. Tesco is already a leading retailer in Hungary, Czech
Republic and Slovakia. This deal will give us a leading position in Poland. By
the year end we will have 84 hypermarkets in Central Europe. This, together with
our 72 hypermarkets in Asia, will give us 156 hypermarkets internationally.'


Tesco Poland Chief Executive, Kevin Doherty, said:

'I am delighted to be able to welcome the HIT management and staff to the Tesco
group. It is an excellent opportunity to bring together two complementary
businesses. There is much we can learn from each other and working together we
can offer improved value, service and range to Polish customers. This deal will
also enable more suppliers to share in the technical support and collaborative
approach Tesco is well known for.'




Note

The agreement between the parties stipulates that the consideration for the
acquisition must remain confidential. Tesco has agreed to such confidentiality
provisions on the basis that the consideration plus assumed debt represents less
than 2.5% of Tesco market capitalisation (as at 3 July 2002), and is not
material in the context of the Tesco group. Tesco expects to obtain the
necessary Government and competition approvals. In the unlikely event they are
not obtained Tesco may have to arrange for some or all of the stores to be sold
on.



CONTACT
Press                      Lucy Neville-Rolfe                       01992 644 141
                           Ian Hutchins                             01992 644 038
                           Angus Maitland                           020 7379 5151

Investors                  Lucy Cross                               01992 646 484



NOTES FOR EDITORS


  • Tesco purchased the Savia chain 1995

  • Tesco opened its first hypermarket in Poland in 1998

  • Business now comprises 47 stores including 15 hypermarkets

  • We moved into profit in 2001/2

  • Tesco employs 9000 staff in Poland of which only 11 are non Polish

  • All of our store directors are Polish




                      This information is provided by RNS
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