[THE INVESTOR] Korean retails giants Shinsegae and Lotte are vying to acquire 100 percent stake in Ministop Korea, local unit of the Japan-based convenience store operator, according to industry sources on Sept. 19.
The parent companies of Emart24 and 7-Eleven declined to elaborate details of their bid. However, according to sources, the acquisition would be crucial for local conveniences store operators, since further expansion by opening new outlets is difficult in the saturated market. As of August, the number of 7-Eleven and Emart24 outlets reached 9,535 and 3,413, respectively.
Ministop has selected Nomura Securities as deal manager to sell its Korean unit. Japanese retail giant Aeon Group is the main shareholder of the Korean operations with 76.06 percent stake. The other stakeholders include Daesang Group and Mitsubishi with 20 percent and 3.94 percent stake, respectively.
According to industry insiders, Ministop decided to exit Korea as it is becoming difficult to operate the business due to escalating competition. The number of Shinsegae’s Emart24 outlets has increased dramatically from 501 during the last five years, outnumbering the 2, 535 Ministop outlets. In addition, the Fair Trade Commission slapped it with a 234 million won fine for signing illegal and unfair contracts with suppliers.
Established in 1997, Ministop Korea’s sales reached 1.18 trillion won last year, which makes it the fourth-largest player after GS25, CU and 7-Eleven.
By Song Seung-hyun (firstname.lastname@example.org)