McDonald’s Korea begins sale process for merger and acquisition

McDonald’s Korea is selling its South Korea business and has now taken the first step towards merger and acquisition. A few other major fast food chains in the country are also looking to sell their business, including Burger King Korea, but McDonald’s is the first to officially start the sale process.

The Korean Herald reported that Mirae Asset Securities, a local capital market firm, was the sale organizer for McDonald’s Korea. He reportedly sent out investment newsletters to potential buyers, marking the start of the merger and acquisition deal for the fast food chain’s Korean unit.

The entire 100% stake in McDonald’s Korea has been placed on the market. The stake is 100% owned by McDonald’s APMEA Singapore Investments Pte Ltd. The letter was 13 pages long and primarily emphasized the restaurant’s dominant position in the local burger market. The letter also highlighted McDonald’s Korea’s high growth potential.

Additionally, the document states that the hamburger joint is still at the top in terms of market share rankings in the country’s hamburger franchise industry, even though it only operates about 400 stores across the country. . It has been noted that it has far fewer outlets than local rivals such as Mom’s Touch and Lotteria, which have over a thousand locations, but McDonald’s Korea never lags behind.

In fact, the average revenue for each store has grown eight percent per year for the past three years. This only shows the advantage and potential of the restaurant in the business.

And that’s not all, McDonald’s Korea also reported a drop in net loss after it was reduced to KRW 33.3 billion or $24.2 million in 2021. The result showed a drop in 28% year over year.

The brand’s earnings before interest, tax, depreciation and amortization (EBITDA) were around KRW 4.6 billion last year. McDonald’s Korea also owns significant real estate, which is another reason why its acquisition is a good investment for buyers.

Meanwhile, Mirae Asset will distribute an Information Memorandum (IM) to include more details on the mcdonalds sale. These will be distributed to potential buyers before the end of this month. Preliminary bidding for the sale is expected to take place next month, with due diligence following through early December.

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