[비즈한국] Harim Group is taking steps to acquire Homeplus Express. This move is interpreted as an effort to complete the final piece of the 'food-logistics-distribution' vertical integration, a long-cherished goal of Harim Group Chairman Kim Hong-kuk. As the Yangjae-dong logistics complex project faces delays, the industry is closely watching whether this bold move by Harim will lead to a new growth engine.
Harim Returns to the SSM Market After 14 Years
Recently, Homeplus announced that it had selected Harim Group subsidiary NS Shopping as the preferred bidder following an open bid for the sale of its Express business unit. Initially, the market had estimated the sale price of Homeplus Express at around 300 billion won, but it is reported that the price proposed by Harim Group in the final bid is lower than that.
Previously, in the preliminary bid that ended on March 31, MGC Global, the operator of Mega MGC Coffee, and distributors in the Gyeongnam region submitted letters of intent (LOI), showing interest. Although Harim was mentioned as a strong candidate from the early stages when the sale of Homeplus Express was discussed, it did not participate in the preliminary bid but joined late for the additional bid. On the other hand, MGC Global and others who participated in the preliminary bid reportedly did not participate in the final bid.
NS Shopping is a food-focused home shopping company 100% owned by Harim Holdings003380. Launched in 2001 as Nongsu-san Home Shopping, it has been expanding its distribution base. This is not its first time in the SSM (corporate-run supermarket) business. In 2009, it entered the offline retail market by introducing 'NS Mart (formerly 700 Market),' modeled after the German deep-discount store Aldi.
At the time, it touted a compact store format that selected and sold only about 700 items at the lowest prices, but it failed to capture consumer demand due to the limitations of a restricted product lineup. The number of stores stalled at around 23, and it eventually exited the business by selling it to E-mart139480 in 2012.
Returning to the supermarket market after 14 years, Harim will secure approximately 300 offline stores if this acquisition is successful. An official from NS Shopping stated, "We expect to further enhance our competitiveness in fresh food and expand customer touchpoints by linking with Homeplus Express's nationwide network of offline stores."
The market is paying attention to NS Shopping's financial capacity. Although NS Shopping's revenue and operating profit remained similar to the previous year, its net profit improved significantly due to the reflection of valuation gains on financial assets. As a result, its cash holdings have also increased rapidly. As of the end of last year, NS Shopping had 55.1 billion won in cash and cash equivalents, and including 82 billion won in short-term financial instruments, the total immediately available funds are around 137.1 billion won. This is an increase of approximately 168.8% compared to the previous year (51 billion won).
As the deal size is estimated to be around 300 billion won, industry analysts suggest that NS Shopping can sufficiently afford it by utilizing its held cash and acquisition financing. In fact, NS Shopping maintains a virtually debt-free structure, so it has significant capacity for additional borrowing, and the possibility of support from its parent company, Harim Holdings, is also being discussed. An NS Shopping official stated, "As of now, support at the group level is not being considered," adding, "We plan to make decisions within the scope of our financial soundness."
'7 Trillion Won' Yangjae Logistics Center Delayed… Eyes Turned to Homeplus?
Some interpret that Harim Group's investment priority may have shifted to Homeplus Express due to the delay in the Yangjae-dong urban high-tech logistics complex project. If construction had begun in the first half of this year as originally planned, the group's overall financial burden would likely have intensified due to the combination of project financing (PF) procurement and construction cost expenditures. The project is known to be a large-scale venture worth a total of 7 trillion won.
However, the situation changed as the start of construction was effectively pushed beyond this year due to the Seoul Metropolitan Government's re-deliberation process. Analysis suggests that as the timing of large-scale fund expenditures was delayed, short-term financial burdens were eased, creating an environment where Harim Group could pursue the acquisition of Homeplus Express.
Harim Group is promoting an urban high-tech logistics complex project in the Yangjae-dong area of Seoul. It is a complex development project combining logistics, business, lodging, and residential functions, and is considered a core project that Chairman Kim Hong-kuk has devoted himself to for a long time. In May 2015, Harim purchased the 83,183㎡ (approximately 25,000 pyeong) site of the former freight terminal in Yangjae-dong for about 450 billion won to pursue the business.
However, the project faced delays during the licensing coordination process with the Seoul Metropolitan Government, and while it seemed to gain speed recently, it was hit with another setback due to the construction committee's decision for re-deliberation. In particular, as the committee demanded a full revision of the design, construction in the first half of this year is virtually impossible.
The variable is future fund management. Currently, there is short-term leeway due to the delay in the Yangjae-dong project, but if construction begins in earnest, additional capital injections could follow. In this process, concerns are raised that financial burdens could grow if investments such as store renewals are added after the acquisition of Homeplus Express.
Challenges also remain in terms of operating Homeplus Express. While Harim has competitiveness in food manufacturing and logistics, it is evaluated as having relatively less experience in offline retail distribution. Some point out that in a situation where major operators like GS The Fresh have already secured the market, it may take time to produce expected synergies if they fail to secure clear differentiation.
An NS Shopping official said, "Homeplus Express already has a stable foundation with about 300 stores nationwide, so we expect to generate synergy immediately once the acquisition is finalized," adding, "Our experience and capabilities in handling fresh agricultural products and various foods for 25 years will be a plus for the stable and sustainable growth of Homeplus Express."