KG Group Completes Sale of KFC to OrchestraPE

KFC Korea, the domestic subsidiary of the global chicken franchise KFC, has been finally sold to Orchestra PE.

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On the 27th, KG Group announced that it had completed the sale to Orchestra Private Equity (Orchestra PE), a domestic private equity fund (PEF) management company. This comes six years after acquiring KFC Korea from CVC Capital in 2017.

KG Group recorded an operating loss of 17.3 billion KRW in 2017, the first year after acquiring KFC, but improved its performance and turned profitable from the second half of 2018, achieving a turnaround with an operating profit of 3.9 billion KRW in 2019.

Since then, KFC recorded sales of 209.9 billion KRW and an operating profit of 4.6 billion KRW in 2021, and last year achieved its best performance with sales of 226.1 billion KRW and an operating profit of 6.1 billion KRW.

Regarding the reason for the sale, KG Group explained, "There were disputes due to differences in contract interpretation with the global KFC headquarters, as well as a uniform global operating policy that did not consider domestic business conditions," adding, "Since KG Group was included in the list of publicly disclosed business groups last year, it was judged that it could no longer operate the franchise under the KFC operating policy of the U.S. headquarters."

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