OURHOME, a meal service company integrated into Hanwha Group, is pursuing the acquisition of the meal service business sector of Shinsegae Food. The market capitalization of Shinsegae Food is around 140 billion won, and the plan is to purchase only the meal service sector for about 100 billion won. This is part of a 'bolt-on' strategy aimed at expanding market dominance and increasing corporate value by acquiring companies in the same industry.
However, there are also critical voices regarding this strategy. Gu Ji-eun, the former vice president of OURHOME, is a representative example. She is a shareholder with a 20.67% equity stake in OURHOME and the third daughter of Gu Ja-hak, the founder of OURHOME. She joined OURHOME in 2004 and led the company as vice president in February 2015 and as CEO in 2021.
According to related industries on the 20th, Gu Ji-eun expressed a negative stance toward the acquisition of Shinsegae Food's meal service sector. On her Facebook on the 11th, she said, "The most foolish strategy in the meal service business is acquiring the goodwill of a peer company," adding, "Meal contracts are usually tendered or renewed on a 2-year cycle, and the structure is unstable as it can suddenly switch to competitive bidding due to small grievances, investments from competitors, or pricing pressures. Some large contracts with Shinsegae Food in the meal service sector may be terminated within 1 to 2 years, and only Emart's captive quantities will remain."
She continued, "It would be difficult to replace the revenue gap caused by the withdrawal of LG affiliates with just the limited volume secured by Emart," noting that "the idea of increasing market share through securing Emart's captive volume seems to reflect a lack of understanding of market realities or represents a risky choice attempting to artificially inflate short-term revenue to appear successful in the face of a financial maturity expected within 2 years."
In response, some in the business community believe that while Gu Ji-eun's judgment is partially correct, the difference in opinions stems from the fundamentally different business model that Hanwha Group intends to implement through OURHOME in the meal service sector, particularly regarding technology-related revenue.
Hanwha Group has stated that from the time of acquiring OURHOME, it would apply Hanwha's food technology to its meal service operations. This could lead to cost efficiencies, such as in labor costs, while also securing revenue sources for Hanwha Food Tech and contributing to its growth.
A business insider noted, "If we have food technology such as automated cooking technology, we need a market to apply it to, and having large meal service sites would easily resolve this issue," explaining that this was the reason Hanwha Group believed it was necessary to acquire a 58% equity stake in OURHOME.
Based on last year's figures, Hanwha Food Tech recorded revenues of 114.9 billion won and an operating loss of 11 billion won. Currently, OURHOME operates 850 business sites nationwide, with 8 production facilities and 14 logistics centers.
In the business community, it is viewed that if OURHOME can implement a business model that achieves profitability in the meal service sector while also promoting the growth of Hanwha Food Tech, it would mean that Kim Dong-seon, the third son of Hanwha Group, achieves everything he strives for.
From the perspective of group succession, it was noted that Kim's share had been the smallest in appearance, but this acquisition addresses that. Hanwha Group's eldest son, Kim Dong-kwan, is focused on the solar energy business, with revenues from Hanwha Solutions totaling around 3 trillion won. The second son, Kim Dong-won, has revenues from Hanwha Life amounting to about 2 trillion won.
However, the revenue classified under Kim Dong-seon's share from Hanwha Galleria was around 500 billion won last year, and even when combined with Hanwha Hotels and Resorts' revenue of 750 billion won, it only reaches around 1 trillion won. This is why combining with OURHOME's revenue (around 2 trillion won) is essential. Additionally, acquiring the meal service business from Shinsegae Food could further expand the market and increase scale.
A business insider remarked, "To achieve group succession, results are necessary, and acquiring just OURHOME cannot be claimed as a success. The objective is to succeed in the food tech business," adding, "Discussions about the acquisition of Shinsegae Food have ultimately emerged in this context, which naturally differs from Gu Ji-eun's perspective."