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[Asia Economy Reporter Kim Bo-kyung] Barogo, the second-largest delivery agency company, is reportedly planning to acquire Saenggakdaero, the number one company, but Saenggakdaero has issued a statement saying the report is "groundless."

A Saenggakdaero official said in a phone interview with this paper on the 17th, "Inseong Data and its subsidiary Saenggakdaero are financially stable. Since they hold a stable position in the market, there is currently no reason for them to be up for sale," adding, "The report that Barogo is pursuing the acquisition of Saenggakdaero is groundless."

On the previous day (16th), some media outlets reported that Barogo was forming a fund with a private equity (PE) firm to acquire Saenggakdaero and was recruiting financial investors (FI).

Barogo stated, "It is true that discussions have taken place between representatives of the two companies, but nothing specific has been decided regarding the acquisition," and added, "It is still at a very early stage, so it is not at a level where we can comment."

In response, a Saenggakdaero official explained, "The discussions currently underway with Barogo are about creating synergies to jointly respond to aggressive marketing by large corporations that handle both order reception and delivery." While they agree on the necessity of cooperation among delivery agencies to compete with fast single-order delivery services like Coupang Eats and Baedal Minjok, they consider acquisition talks premature.

The specific topics discussed between the two companies include ▲ strategic alliances ▲ avoiding cutthroat competition and sharing delivery networks for surplus orders ▲ strengthening delivery capabilities through joint operation of urban logistics centers (MFC) ▲ building a robust urban logistics delivery network by simplifying delivery processes.

Looking at Inseong Data's management performance over the past three years, it recorded sales of 19.9 billion KRW and operating profit of 9.5 billion KRW in 2019, and sales of 14.8 billion KRW with operating profit of 8 billion KRW last year, maintaining a stable operating profit margin. Notably, the company recently signed a strategic partnership with Shinhan Bank regarding delivery platform operations and is set to receive an investment of 45 billion KRW, indicating an increase in corporate value.

Saenggakdaero (company name Logiol) also recorded sales of 32.3 billion KRW last year, successfully turning a profit compared to the previous year. Thanks to its parent company Inseong Data, it has high financial stability with virtually no financial debt.

Meanwhile, Saenggakdaero and Barogo compete for first and second place in the delivery agency industry. As of last year, Saenggakdaero handled approximately 150 million delivery orders, while Barogo handled 130 million.

An industry insider said, "Considering the company's size, performance, and market position, it is unrealistic for the second-largest company in the industry to acquire the number one company."