THE KOREA ECONOMIC DAILY, GLOBAL EDITION

Dongwon Industries Co. will discuss a deal with McDonald’s Corp. to buy the latter’s Korean operations in hopes of riding on the renewed burger boom in South Korea following the fast penetration of foreign premium burger chains in recent years.

According to sources in the franchise restaurant industry, the holding company of Korea’s No. 1 seafood company Dongwon Group on Jan. 17 joined a preliminary tender for McDonald’s Korean operations fully owned by its American parent headquartered in Chicago, Illinois, as an exclusive bidder. The two parties are set to begin negotiations to discuss details, including the price, after Dongwon Industries completed due diligence last week.

This is McDonald’s second attempt to sell its Korean business after its first try in 2016 to sell it to a consortium formed by Korea’s milk product maker Maeil Dairy Industry Co. and US private equity firm the Carlyle Group fell through.

The American hamburger franchise operator is hoping to sell its Korean operations for about 500 billion won ($401 million), according to sources.

DONGWON, FOOD EMPIRE

With McDonald’s under its arms, the Korean seafood giant is seeking to enhance its restaurant franchise business as part of its efforts to enhance its restaurant franchise business.  

Dongwon Group’s food unit Dongwon Home Food Co. has heavily invested even during the COVID-19 pandemic period, opening the premium salad café chain operator Crispy Fresh last year and launching the Italian restaurant brand PORTO 7.

Burger has recently become another hot restaurant business in Korea after several foreign premium burger brands have successfully made inroads into the country to satisfy Korean consumers’ picky taste for fine burgers.

The country’s big three department store operators are seeking to host Gordon Ramsay Burger despite the expensive price tags for its burgers. US chicken burger brand Popeyes is rapidly adding new restaurants in Korea after it re-entered the market late last year, two years after it withdrew from the country. Galleria Department Store under Hanwha Group also plans to bring Five Guys to Korea.

McDonald’s is also expected to create great synergy with Dongwon’s other food-related companies especially food ingredient and packing units, said industry observers.

Dongwon Group has been actively diversifying its business portfolio beyond seafood with mergers and acquisitions (M&A), including US canned tuna producer StarKist Co. in 2008, Techpack Solutions Co. in 2014 and Dongwon Loex Co. (formerly Dongbu Express) in 2017.

Dongwon Industries rose 3.8% to finish at 46,700 won on Monday, outperforming the Kospi ending down 1.7%.

Write to Kyeong-je Han at hankyung@hankyung.com
Sookyung Seo edited this article.