Deal worth 120.6 billion won ($79 million) pursued as part of Homeplus rehabilitation plan; regulators find limited competition concerns

NS Shopping, an affiliate of Harim Group, is set to acquire the Homeplus Express corporate supermarket chain.

The Korea Fair Trade Commission said Friday it approved the acquisition after determining the deal was unlikely to significantly restrict market competition. The transaction is valued at 120.6 billion won ($79 million).

The acquisition was pursued as part of Homeplus's court-led rehabilitation plan, which is currently underway. The Fair Trade Commission said it conducted an expedited review in light of the ongoing rehabilitation proceedings.

A Homeplus Express store in central Seoul. [Photo by Lim Se-jun]
A Homeplus Express store in central Seoul. [Photo by Lim Se-jun]

Harim Group is a poultry and food conglomerate with a vertically integrated supply chain spanning grain procurement, feed, livestock, slaughter, processing and retail distribution. The group produces and sells chicken, pork, duck, processed meat products, home meal replacements and pet food, and operates TV home shopping and e-commerce businesses through NS Shopping.

Homeplus Express is a corporate supermarket, or SSM, regulated under the Distribution Industry Development Act, alongside GS The Fresh, E-mart Everyday and Lotte Super.

The Fair Trade Commission determined that the deal creates 11 vertical combinations between Harim's food production and manufacturing operations and the Homeplus Express retail network, as well as two conglomerate combinations between NS Shopping's TV home shopping and online mall operations and the Homeplus Express offline retail network.

Of those, 10 combinations — excluding three vertical combinations involving chicken (broiler, samgyetang and native chicken) — were found to pose minimal competition concerns due to low market share. Even in the chicken segment, Homeplus Express holds a smaller share than rival SSM operators, and its share falls to around 2 percent when the broader supermarket market is included, making it unlikely that competitors would be foreclosed.

The commission said the approval is intended to help a lower-ranked market player recover and grow into a meaningful competitor against leading players amid rapid structural shifts in the retail sector. It added that the decision is significant for fostering an effective competitive environment in the relevant market.

The Fair Trade Commission said it will continue to expedite reviews of mergers and acquisitions that promote market innovation and support a competitive market environment, while taking a firm stance against combinations that entrench monopolistic positions or substantially restrict competition.


y2k@heraldcorp.com