South Korea’s food-making conglomerate Daesang Corp. is expected to pull out of the highly-competitive convenience store market by selling off its remaining 20 percent stake in modest-scaled Ministop Korea to Japanese partner Aeon Group.

According to industry sources on Wednesday, Daesang and Aeon Group are in the final stage of ironing out the terms of the deal, estimated at from 80 billion won to 90 billion won ($80 million). The parties aim to complete the sale process within March, according to sources familiar with the matter.

Daesang, formerly Miwon that mainly produces seasoning products, established Ministop Korea in a joint venture with Aeon Group in 1997. It sold 55 percent stake plus management right to Aeon Group in 2003.

Currently, Aeon Group commands the largest holding of 76.06 percent, Daesang 20 percent, and Japan’s Mitsubishi 3.94 percent. Aeon’s ownership would reach 96.06 percent after additional purchase while Daesang entirely exits from the convenience store industry.

Ministop is the smallest among five nationwide-serviced convenient store names in Korea with 2,535 stores. No.1 operator is CU with 13,109 stores, followed by GS25 with 13,018, 7-Eleven with 9,549 and E-Mart with 3,564.

Its biggest stakeholder Aeon Group had attempted to sell Ministop operation in Korea last year.

But in January this year, it abruptly suspended the sale process due to the disagreement over the sale price with shortlisted contenders including two Korean retail giants Lotte Group and Shinsegae Group.

Aeon bets it can get more money value out of the sale as additions are difficult under Korea’s new regulation banning new convenience stores to open within 50 meters (164 feet) of existing stores.

Ministop’s operating profit has been on a downward spiral in recent years, shriveling from 13.3 billion won in 2015 to 3.4 billion won in 2016 and 2.6 billion won in 2017 due to fierce competition with industry peers and heavy royalties paid to Japan’s Aeon.

By Moon Il-ho and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]