South Korean food manufacturer Daesang is reportedly exiting the convenience store business, selling its stake in the Ministop chain.
A cut-throat industry in the territory, competition between players has become so intense that legislation is now in effect to forbid the opening of new convenience stores within 50 metres of existing outlets.
Daesang’s withdrawal will likely result in the sale of its 20 per cent shareholding in the Ministop Korea brand to its Japanese partner Aeon, which attempted unsuccessfully to sell its own shares in the business last year.
Insiders familiar with the transaction have revealed that talks between the partners are well-progressed and that the shares are likely to be transferred for KRW80–90 billion (US$70.8–$79.6 million).
Daesang established Ministop with Aeon in 1997, but courted Aeon to purchase a majority stakeholding plus management rights to the business in 2003. The current transaction would remove Daesang from the business entirely, leaving Aeon with a 96.06 per cent stake of the country’s weakest contestant in the nationwide convenience-store playing field.
Ministop achieved KRW2.6 billion ($2.3 million) in profits in 2017, compared with KRW13.3 billion ($11.76 million) in 2015.