Korean Market Already Saturated
McDonald’s, Burger King, Mom’s Touch and KFC have been put up for sale. According to investment banking sources, the estimated price of Mom’s Touch is approximately one trillion won and those of McDonald’s, Burger King and KFC are 500 billion won, 700 billion won and 100 billion won, respectively.
Those companies considerably improved their performances in the pandemic period. For example, Burger King’s sales increased 18.7 percent to 678.4 billion won and operating profit jumped 200 percent to 24.8 billion won in 2021, when the annual sales of McDonald’s were 1.0596 trillion won, the largest since it entered the South Korean market in 1988.
However, their heyday is coming to an end as raw material and labor costs are surging. In addition, the market is already saturated and competitors are increasing, including No Brand Burger, Shake Shack and Gordon Ramsay Burger.
According to experts, the sale of the companies is unlikely to be easy as they are quite similar and the M&A market is currently slow. Burger King and KFC have been in the M&A market since early this year but their deals are yet to be made.