Acquisition of 100% Stake in Korea Ministop for 313 Billion KRW
7-Eleven + Korea Ministop Store Count Expands to Over 14,000 Locations
[Asia Economy Reporter Jo In-kyung] As Lotte Group acquires Korea Ministop, the 5th largest convenience store chain, the 'convenience store big three' system of CU, GS25, and 7-Eleven is solidifying its dominance.
Lotte Selected as Acquirer, Surpassing Competitor Shinsegae's Emart24
On the 21st, Lotte Holdings announced that it had signed a stock purchase agreement to acquire 100% of Korea Ministop's shares. The acquisition price is reported to be 313.367 billion KRW.
Initially, the industry expected the acquisition price to be in the 200 billion KRW range, but Lotte outbid competitors Shinsegae Group's Emart24 and the consortium of private equity firm Anchor Private Equity and food distribution company Nepstone Holdings, securing the acquisition.
Lotte explained, "Through this acquisition, we have secured about 2,600 Ministop stores and 12 logistics centers, expanding our closest customer contact points in the rapidly intensifying quick commerce (immediate delivery) competition targeting nearby commercial districts centered on convenience stores."
A Lotte Holdings official emphasized, "We plan to actively utilize convenience stores, which have established themselves as lifestyle platforms providing various daily life services, in an online-offline convergence strategy to strengthen our online business capabilities."
Japan's Ministop parent company, Aeon Group, entered the Korean market in 1990 by partnering with Daesang to establish Korea Ministop. After Daesang divested all its shares in 2019, Japan Ministop held 100% ownership.
Ministop pioneered the sale of ready-to-eat foods in domestic convenience stores and launched fast-food specialty brands focused on delivery and takeout, leading the food culture in the convenience store industry. However, amid fierce market competition and poor performance, there have been multiple rumors of sale. In 2018, a sale was pursued and even reached the final bidding stage but was halted due to disagreements over the sale price.
Convenience Store Big Three System... Franchise Recruitment Competition Expected to Intensify
With Lotte's acquisition of Korea Ministop, a shift in the convenience store market, previously dominated by GS25 and CU, is anticipated.
As of last year, 7-Eleven stores operated by Korea Seven, a Lotte Group affiliate, numbered 11,173. Adding Ministop's stores brings the total to about 13,800, narrowing the gap with GS25 and CU, each with around 15,000 stores.
Accordingly, the industry views this as an opportunity for 7-Eleven, which had been relatively lagging behind GS25 and CU, to grow and emerge as a strong third competitor.
However, even after Lotte's acquisition of Ministop, some franchisees with expiring contracts may switch to other convenience store brands instead of 7-Eleven. In the past, 7-Eleven expected to secure the second position in the industry by acquiring Lawson and By The Way, but the increase in store numbers fell short of expectations. Some By The Way franchisees opposed the integration due to unfavorable contract terms.
An industry insider said, "This acquisition could be a momentum for 7-Eleven to grow in size and competitiveness. Since some Ministop stores overlap with existing 7-Eleven locations and commercial areas, how well these issues are managed will be crucial."
Meanwhile, Emart24, the 4th largest player aiming to increase its store count to around 8,000 through the Ministop acquisition, has been disappointed. The gap with 7-Eleven will widen further.
An industry source said, "As a latecomer, Emart24 faces limitations in expanding store numbers due to voluntary regulations restricting close proximity openings. Essentially, it has missed its last major opportunity to significantly increase its store count."
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