Lotte Acquires Ministop... Establishing a Top 3 Convenience Store System

[Asia Economy Reporter Lim Chun-han] With Lotte acquiring Korea Ministop, the 'convenience store big three system' of CU, GS25, and Seven Eleven has been established.

According to the industry on the 17th, Samil PwC, the lead manager for the sale of Korea Ministop, is expected to announce the preferred negotiation partner as early as this week. The main bids included participation from Lotte, Shinsegae, and the Nepstone Holdings consortium. Although Lotte did not participate in the preliminary bidding, it expressed its intention to acquire during the main bidding. Lotte is reported to have offered the highest acquisition price among bidders at 300 billion KRW. The initially estimated appropriate sale price for Ministop in the market was in the 200 billion KRW range.

In the convenience store industry, the number of stores is a key indicator directly linked to economies of scale and sales. As of the end of last year, CU and GS25 are competing for first and second place with about 15,000 stores each. The combined number of stores of Seven Eleven (11,173) and Korea Ministop (2,620) totals 13,793, narrowing the gap with the first and second places to around 2,000 stores. The gap with the fourth place, Emart24 (about 5,800 stores), will also widen significantly.

However, a Lotte Group official stated regarding the acquisition of Ministop, "We are reviewing the acquisition, but nothing has been decided yet," and added, "We have not received any notification related to the acquisition."

Previously, Korea Ministop proceeded to the main bidding in 2018, but the sale process was halted due to disagreements over the sale price. At that time, Lotte and Shinsegae also participated in the acquisition battle, but the Aeon Group completely canceled the sale, citing the price as too low. Korea Ministop recorded sales of 1.0794 trillion KRW and an operating loss of 14.3 billion KRW for the last fiscal year (March 2020 to February 2021).