To Expand Restaurant Business
Dongwon Group is moving to take over McDonald's Korea. Dongwon Industries, the group's holding company, was the only bidder in a preliminary tender for McDonald's Korea held on Jan. 17. The first round of due diligence was conducted last week. The two sides started negotiating on the price. McDonald's asking price was reported to be around 500 billion won.
This is the second time that McDonald's Korea has been put up for sale. Its U.S. parent held negotiations with the Maeil Dairies-Carlyle consortium to sell McDonald's Korea in 2016, but their negotiations fell apart at the last minute. In June of last year, the U.S. parent resumed the process to sell the hamburger chain.
Dongwon Industries merged with Dongwon Enterprise in November last year, becoming the holding company of Dongwon Group. The group has a big interest in mergers and acquisitions (M&As) to expand its business areas beyond the fishery industry, its main business. This acquisition is expected to help Dongwon Group further expand its restaurant business and maximize synergies with its food and beverage affiliates.
McDonald's Korea has suffered a loss over the past three years in a row. In 2021, its sales increased by 9.7 percent on year to 867.9 billion won, achieving the highest sales since entering the Korean fast food market. But it failed to turn a profit and posted an operating loss of 27.8 billion won.