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Shinsegae chairman to buy mother's entire Emart stake for $147 million

Published: 10 Jan. 2025, 19:15 Updated: 12 Jan. 2025, 16:15

KIM JU-YEON
[email protected]

Shinsegae Group Chairman Chung Yong-jin, left, will buy mother Lee Myung-hee's entire 10 percent stake in Emart for 214.8 billion won. [YONHAP]

Shinsegae Group Chairman Chung Yong-jin will buy his mother’s entire 10 percent stake in group affiliate Emart, a move expected to lay the groundwork for the retail giant’s previously announced split into two different entities for its supermarket and department store divisions.

Chung will spend around 214.8 billion won ($146.5 million) of his own funds on Shinsegae Group Chair Lee Myung-hee’s 2,787,582 Emart shares. The purchase will be made during after-hours trading between Feb. 10 and March 11, according to an electronic disclosure the supermarket chain filed on Friday.

Shinsegae Group includes a supermarket and department store division, Emart being the de facto arm of the supermarket division and Shinsegae representing the department store section. Emart has subsidiaries including Traders Wholesale Club, convenience store chain Emart24 and online mall Gmarket, Shinsegae F&B and food and beverage firm SCK Company, which is better known as Starbucks Korea’s operator. Shinsegae operates department stores, duty-free and fashion retail businesses. The two both own stakes in online shopping site SSG.com.

Chung’s purchase will bump his current 18.56 percent interest to 28.56 percent in March. His mother, Lee, had gifted an 8.22 percent stake in Emart to her son in 2020 that made him the firm’s majority shareholder.

At the same time, Chung’s sister, Chung Yoo-kyung, was gifted an 8.22 percent stake in Shinsegae, which also made her the majority shareholder of the division.

Shinsegae Group said in October of last year that it would split the supermarket and department store arms into two separate entities to make them “more competitive in their respective main businesses.” While the two divisions had already been operating independently as separate departments, the legal split would allow them to more freely secure partnerships or launch new businesses than in its current structure, where such actions could interfere with each other’s interests.

Under the Monopoly Regulation and Fair Trade Act, family members who own shares in a publicly listed company must own less than 3 percent each for an entity split to be legal.

Chung is purchasing Lee’s 10 percent stake to “strengthen his [philosophy of] a responsible management that is based around meritocracy,” Emart said in a statement.

“Chairman Chung is showing his sense of responsibility and confidence in raising Emart’s corporate value by using his personal funds to purchase Emart shares,” the supermarket chain said.

BY KIM JU-YEON [[email protected]]