UK supermarket group Tesco has announced it has agreed with Samsung Corporation to extend their retail joint venture in Homeplus in South Korea until at least 2011.

The original five-year agreement was signed in 1999. As part of the agreement, Tesco will buy a further 10% of Homeplus shares from Samsung Corporation over the next seven years, taking its interest to 99%. 

"We are delighted to be extending our successful joint venture with Samsung Corporation. Together we have built-up a world-class business and are very excited about the future growth opportunities in Korea," said Andrew Higginson, Tesco's finance and strategy director.

These share purchases will be in two stages, the first in July 2007 and the second in July 2011. The total consideration, which is estimated to be around £200m, depends on the performance of the business in the years prior to the two transactions and will be based on multiples of EBITDA. 

Since the creation of the joint venture in May 1999, when Tesco purchased a controlling 51% interest in Homeplus from Samsung, the business has grown rapidly, and now has 30 hypermarkets. Tesco increased its interest in Homeplus to 81% in June 1999 and to 89% in February 2002.