McDonald's Korea close to being sold to Dongwon Industries

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McDonald's Korea close to being sold to Dongwon Industries

Published: 06 Feb. 2023, 16:14 Updated: 06 Feb. 2023, 19:51

A branch of McDonald's Korea situated in Seoul [NEWS1]

Dongwon Industries has been chosen as the sole bidder for McDonald's Korea in a 500 billion won ($400.8 million) deal, according to local reports.

The sale by the Chicago-based parent company is being managed by Mirae Asset Securities.

“We are looking at several options now with an external professional institution,” said a spokesperson from McDonald’s Korea.

The two sides conducted the first round of inspections last week, according to the reports.

It’s not the first time McDonald’s Korea has been put up for sale. In 2016, the U.S. parent negotiated a sale with a Maeil Dairies-Carlyle consortium, but the deal fell through.

McDonald’s Korea has lost money for the last three years. In 2021, the operating loss was 27.8 billion won, in 2020 48.4 billion won and in 2019 44 billion won.

The company has 400 locations in Korea.

McDonald’s Korea was established in 1986, and the first location was opened in the country in 1988 in Gangnam. The U.S. headquarters acquired 100 percent ownership in 2006. If Dongwon Industries buys McDonald’s Korea, it will control the Korean operations and pay a 5 percent royalty to McDonald's.

KRX-listed Dongwon Industries merged with Dongwon Enterprise last November.

The company declined to confirm the transaction.

In 2008, the company acquired Starkist, the tuna brand. It also acquired two logistics firms — Dongbu Express, now known as Dongwon Loex, in 2017 and BIDC, a logistics center, in 2018.

Dongwon Industries was up 3.78 percent to close at 46,700 won on Monday. The stock is down 26 percent over the past five years.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]