South Korea’s antitrust regulator, the Fair Trade Commission (FTC), officially approved NS Shopping Co.’s significant acquisition of Homeplus Express, the compact-format supermarket chain. The FTC’s decision, announced Friday, asserts that the deal will not impede fair market competition.
This crucial ruling by the Fair Trade Commission follows NS Shopping’s declaration of its intent to acquire Homeplus Express from its parent company, Homeplus Co. NS Shopping, a subsidiary of Harim Co. – recognized as South Korea’s largest poultry-processing firm – is finalizing the acquisition in a deal valued at approximately 120.6 billion won (about $79.3 million).
Homeplus Express operates as the super supermarket (SSM) brand under the broader Homeplus retail umbrella.
The FTC confirmed its thorough review of the transaction, which encompassed analyses of 11 vertical mergers and two conglomerate mergers.
For clarity, a vertical merger involves companies operating at various stages within the same industry’s supply chain, whereas a conglomerate merger takes place between businesses across different industries.
The antitrust watchdog ultimately concluded that potential concerns regarding the merger’s impact on market competition are minimal, primarily due to Homeplus Express’s comparatively modest market presence.
Specifically addressing chicken products, the FTC highlighted that Homeplus Express maintains a low share of the super supermarket (SSM) market, approximately 2 percent.
The commission further affirmed, “It is improbable that other poultry-processing companies will be unfairly excluded from the market, or that other retailers will face disadvantages stemming from a lack of access to poultry products supplied by Harim.”
This acquisition provides a new direction for Homeplus, which has faced significant financial challenges. Private equity firm MBK Partners originally acquired a 100 percent stake in Homeplus in 2015 from British retailer Tesco Plc for 7.2 trillion won. However, the retailer later experienced severe financial strain amid a downturn in the discount store industry, ultimately entering court-led rehabilitation proceedings in March of the previous year.
