Homeplus Express, a division of Homeplus currently involved in restructuring processes, is planned to be purchased by NS Shopping.
On the 12th, the Korea Fair Trade Commission (KFTC) stated that it has given approval to a corporate merger where NS Shopping will acquire the business segment of Homeplus Express from Homeplus at a cost of 120.6 billion South Korean won.
NS Shopping is part of Harim, a major poultry and food company that integrates various stages including grain sourcing, feed production, animal raising, slaughter, processing, and delivery. Homeplus Express falls under the classification of corporate supermarkets (SSMs), regulated by the Distribution Industry Development Act, alongside GS The Fresh, Emart Everyday, and Lotte Super.
The KFTC believed that this business transaction would lead to 11 vertical mergers—involving the integration of firms at different levels within the supply chain, ranging from raw material sourcing to manufacturing, distributing, and selling finished goods. It assessed that two hybrid mergers, involving the combination of companies operating in separate sectors, would take place as well.
Nevertheless, it was determined that the remaining 10 vertical and hybrid combinations, apart from three vertical ones associated with poultry products, are improbable to substantially hinder market competition because of their minimal market presence.
Even with regard to vertical integrations involving chicken meat, the KFTC observed that Homeplus Express has a smaller market presence compared to rival small-scale supermarkets and maintains a low single-digit percentage within the broader grocery store sector. Consequently, it gave approval to the business merger, stating that it is improbable that competitor companies processing chicken meat would be barred from the market because they cannot access distribution channels or that rival suppliers would suffer due to not obtaining Harim's processed chicken products.
The KFTC mentioned that it quickly finished the review about one month following the announcement of the business merger, taking into account that Homeplus is currently in bankruptcy restructuring processes.