Home > Business > Industry

With no suitable bidders, Homeplus faces uncertain future as lawmakers and labor squabble

Published: 27 Nov. 2025, 19:23

A Homeplus branch in Seoul is seen on Oct. 31. [NEWS1]

The fate of Homeplus’ corporate rehabilitation has entered uncertain waters after no bidders submitted proposals in the main auction held Wednesday. If a second round of bidding fails, liquidation could become a real possibility.

Calls for government intervention are growing, citing the potential impact on local economies and employment. While some lawmakers say the National Agricultural Cooperative Federation (Nonghyup) is best suited to acquire Homeplus, opposition to the idea suggests the deal won’t be easy to achieve.

Sale efforts stall

The Seoul Bankruptcy Court confirmed Wednesday that no companies submitted bids by the deadline for the open auction of Homeplus.

“We will decide on the next steps in the rehabilitation process — whether to develop an internal plan or move forward with a second bidding round — after internal discussions,” the court said.

Harex InfoTech and SnoMad, which had participated in the preliminary bidding, did not advance to the final round.

“If a suitable buyer emerges before the submission deadline for the rehabilitation plan on Dec. 29, the sale process and submission timeline could be extended,” said a Homeplus official. “We will continue to accept proposals until then.”

“Regardless of the auction result,” the official added, “a merger or acquisition is the most viable rehabilitation path, and we will do our utmost to make it happen.”

Nonghyup Chairman Kang Ho-dong, center, is seen during an audit at the National Assembly in Yeouido, western Seoul on Oct. 24. [NEWS1]

Three factors holding back the sale

No strong candidate has emerged to acquire Homeplus so far. The obstacles include high valuation, a sluggish retail market and employment burdens.

As Korea’s economic downturn drags on, M&A opportunities in the retail sector have piled up — with few buyers in sight. Homeplus, the country’s second-largest hypermarket chain, is considered too expensive, with a valuation of 7 trillion won ($4.8 billion).

Debt levels are also a major concern. Homeplus holds 2 trillion won in financial liabilities, including loans for operating capital, and has 92 billion won in unpaid property and local taxes.

With consumers shifting to online shopping, large supermarkets have seen declining sales. A report by Samil PwC submitted to the court estimated the liquidation value of Homeplus at 3.68 trillion won, higher than its going-concern value of 2.51 trillion won.

Labor is another hurdle. Any acquiring firm would face pressure to maintain employment. The company directly employs around 20,000 workers and indirectly employs 80,000 to 90,000, according to the Homeplus chapter of the Mart Industry Union under the Korean Confederation of Trade Unions (KCTU).

The union has called for government intervention. On Nov. 17, union members held a rally outside the presidential office in Yongsan District, central Seoul, saying, “The government cannot ignore the livelihoods of over 100,000 people and local commercial districts,” urging a state-led M&A to avoid restructuring.

Shoppers are seen entering a Homeplus branch in Seoul on Oct. 31. [NEWS1]

Political pressure: 'You buy it’

Lawmakers have floated Nonghyup as a potential buyer. During a National Assembly audit last month, Rep. Eoh Kiy-ku of the Democratic Party, who chairs the Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee, asked Nonghyup Chairman Kang Ho-dong to consider the acquisition “from a public interest perspective.”

Kang pushed back, saying, “Nonghyup and Hanaro Mart suffered operating losses of 40 billion won last year and had to lay off over 200 employees. It’s not appropriate to talk about an acquisition.”

Critics argue the acquisition would be structurally incompatible. Nonghyup and Hanaro Mart are organized around stabilizing prices and purchasing domestic agricultural products — a model fundamentally different from that of large-scale retail.

“There’s no economic or operational synergy to be gained from acquiring Homeplus,” said the NH Nonghyup branch of the Federation of Korean Trade Unions (FKTU). “Improving Nonghyup’s own retail operations should come first.”

Still, political momentum is unlikely to subside. In a recent Realmeter poll of Korean adults, 38.8 percent selected Nonghyup-affiliated retail firms as the most suitable candidate to acquire Homeplus.

Lawmakers and participants are seen during a rally calling for the government to intervene in the rehabilitation of Homeplus in front of the National Assembly building in Yeouido, western Seoul on Nov. 26. [NEWS1]

Experts: ‘Restructure assets first’

Experts say Homeplus needs to streamline its store network and improve facilities to become a competitive M&A target.

“Rather than relying on political support, MBK Partners and the union should take a more proactive approach to downsizing and reorganizing the company,” said Lee Jong-woo, an adjunct professor of business administration at Ajou University. “That’s how Homeplus can be positioned as a desirable asset.”

Others argue that Korea’s retail regulations must be updated to reflect long-term shifts in the industry.

“Current regulations like the Distribution Industry Development Act are insufficient to protect local small businesses in an online-first economy,” said Kim Yong-jin, a professor of business administration at Sogang University. “Local governments, central authorities and retailers must work together to draft effective and realistic solutions.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM KYUNG-MI,NOH YU-RIM [[email protected]]