Hongkook Kim’s M&A Instincts Stir... Harim’s ‘Supermarket Comeback’: How Will It Fund the Homeplus SSM Acquisition?

Homeplus Express Sale in Progress
Harim Affiliate NS Home Shopping Selected as Preferred Bidder
300 Billion Won Acquisition Fund... Potential for Group-Level Financial Support
Linking Online and Offline Channels to Strengthen Fresh Food Competitiveness

NS Home Shopping, an affiliate of Harim Group, has been selected as a leading candidate to acquire Homeplus Express, the supermarket (SSM) chain of Homeplus, which has entered corporate rehabilitation proceedings. Having started in the chicken distribution business and propelled his group to 30th place in the Korean business rankings through various mergers and acquisitions (M&A), Hongkook Kim, Chairman of Harim Group, is once again making a bold move in the distribution sector. With NS Home Shopping holding cash assets worth tens of billions of won, attention is now focused on how the company will secure acquisition funds exceeding twice its current cash holdings.

According to industry sources on April 22, NS Home Shopping (NS Shopping), the operator of NS Home Shopping, was designated as the preferred bidder in the open bidding for Homeplus Express, which closed the previous day as part of Homeplus’s rehabilitation process. With the Seoul Bankruptcy Court having extended the deadline for approval of Homeplus’s rehabilitation plan by two months to May 4, both the sale manager and the acquirer intend to swiftly conclude negotiations on the details and proceed with the main contract.

NS Home Shopping logo. Provided by NS Home Shopping

During the process of selling Homeplus Express, the possibility of Harim Group joining the race was consistently raised. However, after letters of intent (LOIs) were submitted last month, only two companies—MGC Global, the operator of MegaMGC Coffee, and a distribution company based in Gyeongnam—were reported to have shown interest. In the main bidding that followed due diligence, however, these firms dropped out, and NS Shopping, an affiliate of Harim Group, entered the bid, dramatically altering the landscape.

The estimated acquisition price for Homeplus Express, as assessed by the market, is around 300 billion won, which is significantly lower than the over 1 trillion won once discussed before the company entered court receivership. Considering the tight bidding schedule and Homeplus’s deteriorating financial condition, the prevailing view is that the actual bid submitted by NS Home Shopping will fall short of 300 billion won.

The key point of interest is the funding strategy. From 2023 through last year, NS Shopping maintained stable results with annual sales of around 600 billion won and operating profit between 40 and 50 billion won. However, as of the end of last year, its cash and cash equivalents—classified as assets available for investment with a maturity of three months or less from the acquisition date—stood at just 5.51 billion won. In addition, the company holds 8.2 billion won in short-term financial products that can be converted to cash within a year, including 6 billion won in time deposits, but 1.1 billion won of this amount is in co-prosperity deposit funds and other accounts that cannot be withdrawn until maturity.

An NS Shopping representative stated, “As the preferred bidder, we are in a position where we must proceed with discussions regarding the acquisition, so it is difficult to comment on specific plans. However, since we have thoroughly reviewed the feasibility of the acquisition, there should be no issues in raising the required funds.” Accordingly, there is speculation about the possibility of support at the group level. As of the end of last year, Harim Holdings, the group’s holding company, possessed cash and cash equivalents amounting to 1.4593 trillion won.

Some analysts believe that the competition for the acquisition of Homeplus Express has reignited Chairman Hongkook Kim’s M&A instincts. Kim is a self-made entrepreneur who, at the age of 11, raised and sold 10 chicks purchased by his grandmother, using the proceeds as seed capital to build Harim into the country’s top meat processing group. Along the way, he expanded the company through M&As in diverse sectors, including feed, food processing, shipping, and logistics.

In 2001, he acquired Jeil Feed, followed by Sunjin, a pork processing company, in 2007, and Farmsco, the livestock processing business of Daesang Group, in 2008. In 2015, he spent about 1 trillion won to acquire Pan Ocean, the largest bulk carrier in Korea, and in 2024, he was selected as the preferred bidder for the acquisition of Korea’s only ocean-going container shipping company, HMM (formerly Hyundai Merchant Marine). However, at that time, Harim’s bid of over 6 trillion won ultimately failed to materialize due to differences with the Korea Development Bank and other creditors regarding the guarantee of management rights.

If Harim Group acquires Homeplus Express, it will mark its return to the SSM market for the first time in 14 years since 2012. Previously, in 2006, NS Home Shopping launched ‘700 Market,’ a store modeled after Germany’s discount chain Aldi. By reducing marketing and interior costs and displaying boxed goods instead of using shelves, the number of products handled was limited to 700, thereby enhancing price competitiveness. This offline sales channel was rebranded as NS Market in 2010, but due to competition from rivals with greater buying power, it was sold to Emart for around 40 billion won in 2012.

The company expects that, through Homeplus Express—which operates nearly 300 offline stores—it can expand the distribution network for the group’s food-related businesses and create synergy with partner companies by connecting online and offline operations. As of the end of last year, Homeplus Express had 295 stores, with 70% located in the Seoul metropolitan area.

NS Home Shopping stated, “By linking our existing businesses—TV home shopping, T-commerce, and online/mobile malls—with Homeplus Express’s nationwide offline stores, we will be able to offer our existing small food partners new opportunities to expand their reach through offline stores, while providing current Homeplus Express partners with new growth opportunities through online and mobile channels. Through this, we expect to further enhance our competitiveness in fresh food and broaden our customer touchpoints.”

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