Tesco is breaking its decade-long pursuit of overseas organic growth, with a record cash purchase of a chain of hypermarkets in South Korea.

Britain's biggest chain is buying 36 stores owned by E-Land Group in and around Seoul, where 11m potential Tesco customers live, for just under £1bn ($1.95bn), including the assumption of existing debt.

It is the first time that Tesco has spent anywhere near this kind of money on an international acquisition. The chain has previously preferred to grow from the ground up, through joint ventures with local partners and store-by-store growth.

But Phil Clarke, international director of Tesco, stressed that the deal did not herald a more radical era of expansion for the grocer.

He said: "We prefer organic growth, that is always our priority and will remain so, but these 36 stores give us two and a bit years of growth in one hit. In 4½ years in this job I have done two deals [the other one being an asset swap with Carrefour]. I don't see an acceleration of deals at all".

The acquisition shows that Tesco is determined to gain pole position in chosen markets - even if that involves major expenditure. Korea is the retailer's biggest market outside the UK, with £2.7bn of sales coming from 66 hypermarkets and 72 convenience stores. That turnover will be closer to £4bn once the deal goes through.

Tesco said the Korean purchase would have a neutral impact on profits in the second year of ownership and boost them after that. About half the price was the assumption of debt. Tesco will fund the deal from existing facilities.

Mr Clarke tried to buy the stores back in 2006, when Carrefour, the then-owners, decided to exit Korea, eventually selling the stores to E-Land for €1.5bn ($2.3bn).

"We would have bought them then had we been prepared to pay the price put forward but we weren't," said Mr Clarke. He declined to comment on whether Tesco was paying more for the stores now than it had been willing to pay back then.

JPMorgan said the deal gave Tesco a fighting chance to close the gap on Shinsegae's E-mart, which has sales of Won9,000bn ($8.6bn), against Tesco's Won5,900bn. "Korea is a very interesting market long-term as the sector has become a two-horse race in a big economy," it said.

Elsewhere, Mr Clarke is still working on India, and hinted that Tesco could be warming to Russia, a hotspot for rivals Wal-Mart (NYSE: WMT - News) and Carrefour. "Russia is not never. You know how long we looked at America. But we have more than enough to keep us busy in the markets we are in," he said. The shares closed 1.7 per cent down.