MBK plans to exit from Homeplus investment

Jiong-Jiong Yu
Senior Retail Analyst

Date : 17 November 2020

South Korea’s leading private equity firm MBK is making plans to exit from its investment in the country’s third largest grocery retail chain, Homeplus.

Selling top branches and poised to exit

MBK owns a 100% stake in Homeplus after paying KRW7.2 tn (US$6.5 bn) in 2015. Homeplus Union claimed that MBK sold several real estate assets, including branches, land and employee training and logistics centres since its acquisition of Homeplus.

Homeplus' operating profit dropped from KRW309 bn in 2016 to KRW269 bn in 2017 and KRW151 bn in 2018.

In June this year, the company has put three branches, Daegu, Daejeon and Ansan, up for sale, with the purpose of closing these stores permanently rather than leasing them back afterwards to maintain the store network.

Homeplus currently has more than 140 stores across the country, of which the Ansan branch is one of the best performing stores. The Daejeon branch is also among the top 30, and the Daegu branch is the oldest Homeplus store in the country.

Selling these key branches and top performing stores is an indication that MBK is looking to exit rather than maintaining Homeplus business.