South Korea’s competition regulator has approved NS Shopping’s acquisition of Homeplus Express, concluding that the transaction is unlikely to significantly affect market competition.
The Korea Fair Trade Commission (FTC) announced Friday that it had completed its review of the deal, under which NS Shopping will acquire Homeplus Express from Homeplus for approximately 120.6 billion won (about $79 million).
NS Shopping is affiliated with Harim Group, one of South Korea’s leading food companies and the country’s largest poultry producer. Homeplus Express operates as the convenience-sized supermarket division of Homeplus.
According to the FTC, the transaction involved reviews of multiple business relationships, including 11 vertical merger cases and two conglomerate merger cases. Vertical mergers occur when companies participate in different stages of the same supply chain, while conglomerate mergers involve businesses operating in separate industries.
After examining the proposed acquisition, regulators determined that the combined company would not have sufficient market power to limit competition or harm consumers.
The FTC specifically noted that Homeplus Express holds only a small share of the super supermarket (SSM) sector. In the case of chicken products, the company’s market share is estimated at roughly 2 percent, reducing concerns that competitors could be excluded from distribution channels.
Regulators also stated that rival poultry suppliers are unlikely to be disadvantaged by Harim’s involvement, and other retailers should continue to have adequate access to poultry products.
The transaction comes as Homeplus continues efforts to restructure its business. In 2015, private equity firm MBK Partners acquired Homeplus from British retailer Tesco in a deal valued at 7.2 trillion won. However, the retailer later struggled amid declining performance in the discount store sector and entered court-led rehabilitation proceedings in March of last year.
Homeplus and NS Shopping formally signed an agreement in May to transfer ownership of the Homeplus Express business, marking a significant step in Homeplus’ ongoing restructuring process.