S. Korea's FTC Approves NS Shopping's Takeover of Homeplus Express

By Kang Yoon-seung SEOUL, June 12 (Yonhap) -- South Korea's antitrust watchdog on Friday approved NS Shopping Co.'s takeover of the compact-format supermarket chain Homeplus Express, saying the deal is unlikely to hinder fair competition in the market. The Fair Trade Commission (FTC) made the ruling after NS Shopping, an affiliate of Harim Co., South Korea's largest poultry-processing company, announced its plan to acquire Homeplus Express from Homeplus Co. in a deal estimated at 120.6 billion won (US$79.3 million). Homeplus Express is the super supermarket (SSM) brand of Homeplus. The FTC said it had reviewed the deal as involving 11 vertical mergers and two conglomerate mergers. A vertical merger occurs when companies operate at different stages of the same supply chain within an industry, while a conglomerate merger occurs between businesses in different industries. The watchdog said it had determined that concerns over the merger's impact on competition remain limited, given Homeplus Express' relatively small market presence. "In terms of chicken products, Homeplus Express' share of the SSM market remains low, at around 2 percent," the FTC said. "It is unlikely that other poultry-processing companies will be excluded from the market, or that other retailers will be placed at a disadvantage due to a lack of access to poultry products supplied by Harim," it added. Private equity firm MBK Partners acquired a 100 percent stake in Homeplus in 2015 from British retailer Tesco Plc for 7.2 trillion won. The retailer, however, became financially strapped due to a slump in the discount store industry and eventually entered court-led rehabilitation proceedings in March last year. Homeplus signed an agreement to hand over the Homeplus Express business to NS Shopping in May.