Emart24 Joins Ministop Acquisition Battle... Struggling to Determine Appropriate Sale Price

Restrictions on New Convenience Store Openings
Participation to Expand Store Numbers
Store Owners' Change of Heart a Variable, Effect Uncertain

[Asia Economy Reporter Lim Chun-han] Emart24 has stepped up to acquire Korea Ministop, but the road ahead is steep. The intention is to acquire Ministop, which is currently practically unable to open new convenience store locations, to increase the number of stores and realize economies of scale. However, since the actual effect of increasing the number of stores is minimal, determining an appropriate sale price is expected to be crucial.

◆ Lotte Withdraws, Shinsegae Participates = According to the convenience store industry on the 3rd, Emart24 submitted a preliminary bid application to Samil PwC, the sales agent for Ministop. Besides Emart24, private equity funds (PEFs) such as Neopstone Holdings, Anchor Equity Partners, and Unison Capital also participated in this preliminary bidding, and Samil PwC is expected to select qualified acquisition candidates and proceed with the main bidding next month.

Emart24 aims to expand the number of stores through the acquisition of Ministop. In the convenience store industry, the number of stores is a key indicator directly linked to economies of scale and sales. Currently, Emart24 ranks 4th in the industry but is struggling to expand its business due to voluntary regulations restricting new convenience store openings. As of the end of last year, CU and GS25 are competing for the top spot in the industry with 14,923 and 14,688 stores respectively. Following them are Seven Eleven with 10,501 stores, Emart24 with 5,169 stores, and Ministop with 2,603 stores.

◆ '1+1 ≠ 2' = Industry insiders say that a complete merger and acquisition is virtually impossible. A senior official in the convenience store industry explained, "After acquiring Ministop, if franchisees move to competing brands once existing contracts expire, there is no way to prevent it," adding, "In the past, Seven Eleven also expected to secure the second position in the industry by acquiring Lawson and Buy the Way, but ultimately fell short of expectations." At that time, some Buy the Way franchisees delayed the integration process for years due to unfavorable contract terms and did not enjoy the expected benefits.

Because of this, there are also talks that the acquisition price might be expensive. Previously, Korea Ministop proceeded to the main bidding in 2018, but the sale process was halted due to disagreements over the sale price. At that time, Lotte and Shinsegae participated in the acquisition battle, but the Aeon Group completely canceled the sale citing the price was too low. The sale price at that time was about 400 billion KRW, and now it is estimated to be in the 200 billion KRW range, nearly halved, but the view that it is still expensive dominates. Korea Ministop recorded sales of 1.0794 trillion KRW and an operating loss of 14.3 billion KRW in the last fiscal year (March 2020 to February 2021).

This content was produced with the assistance of AI translation services.