South Korea's FTC approves NS Shopping's acquisition of Homeplus Express

South Korea's Fair Trade Commission (FTC) has approved the acquisition of Homeplus Express by NS Shopping, a subsidiary of the Harim Group. The deal, valued at 120.6 billion won, involves the purchase of the retail operations of Homeplus Express, which is currently undergoing corporate rehabilitation proceedings.

The FTC determined that the acquisition is unlikely to pose a significant threat to market competition. NS Shopping, already active in TV home shopping and e-commerce, will integrate the corporate supermarket chain (SSM) operations of Homeplus Express. Harim Group is primarily known for its poultry and food processing businesses.

The commission identified potential vertical and hybrid integration resulting from the deal. Vertical integration involves combining companies at adjacent stages of production, such as Harim's food production and Homeplus Express's distribution. Hybrid integration involves combining companies in different sectors, like NS Shopping's existing retail channels and Homeplus Express's offline stores.

However, the FTC concluded that market share in most of these combined areas remains low, minimizing competitive concerns. An exception was noted for three vertical integrations related to chicken products (broilers, samgye-tang, and native chickens), but even in this sector, the potential for excluding competitors or disadvantaging other chicken suppliers was deemed minimal. The relatively low market share of Homeplus Express, especially when considering the broader supermarket market, contributed to this assessment.

The FTC expedited its review of the merger, acknowledging that the acquisition is part of Homeplus's rehabilitation plan. The commission stated its commitment to promptly reviewing pro-competitive mergers to foster a dynamic market environment.