KG Group, a fast expanding Korean farming chemical conglomerate, has been tapped to take over the Korean operation of American fried chicken brand KFC.
According to sources in the investment bank (IB) industry Thursday, KG Group will soon sign a stock purchase agreement with CVC Capital Partners to acquire its 100 percent stake in SRS Korea which currently runs the KFC business.
CVC owns SRS Korea through its special-purpose company Restaurant Investment Korea. The private equity fund named Deloitte Anjin as the lead manager for the sale.
The sale price could reach about 50 billion won ($44.14 million), which would be halved from what CVC originally had paid to buy the fried chicken franchise business from Doosan Group in 2014 due to the poor performance of the fast food chain.
KFC Korea’s operating profit shrank to 1.1 billion won in 2015 from 6.8 billion won in 2014 and 11.5 billion won in 2013 due to mushrooming and popularity of local fried chicken brands. Fried chicken in Korea is a popular delivery food or a side menu for beer, a major reason for shunning the American fast-food chain.
KG Group has been eager in food and dining business. It has formed a consortium with NHN Entertainment last year to bid for the Korean unit of McDonald’s Corp.
By Chun Gyung-woon and Yoo Tae-yang
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]