SPC Group separated Paris Croissant, which sits at the top of its governance structure, into an investment and management institutional sector and a business institutional sector, moving to establish a holding company structure. The company said the decision was for management efficiency, but industry watchers mostly view it as a signal that succession to a system led by Vice Chairman Hur Jin-soo and President Hur Hee-soo, the third generation of the Oner family, is accelerating.
According to the industry on the 28th, SPC Group resolved the physical split of Paris Croissant at a board meeting on the 21st and plans to finalize it at a shareholders meeting next month. Paris Croissant has effectively served as a holding company, as the largest shareholder with 40.7% equity in SPC Samlip and with 51 affiliates at home and abroad. However, there has been ongoing criticism that decision-making is slow and management efficiency is low because brand operations and investment and management functions are mixed within a single corporation.
Once the partitioning is completed, Paris Croissant will be divided into a surviving entity responsible for investment and management functions and a newly established business company that operates Paris Baguette, Pascucci, La Grillia, and others. SPC said, "This is a measure to create a faster management system by separating core roles." The surviving entity will focus on the role of a holding company going forward, while the business company will be dedicated to brand operations and new business development.
The goal is to strengthen the independence of the business institutional sector and the transparency of the governance structure. If the holding company structure takes hold, the decision-making structure will be simplified and equity adjustments will become easier, leading to expectations that the foundation for brother-led management will be further solidified.
The industry sees this decision as directly connected to succession work, beyond simple structural improvement. The decision for partitioning came right after, on the 4th of this month, eldest son Hur Jin-soo, president of Paris Croissant, was promoted to vice chairman, and second son Hur Hee-soo, executive vice president of BR Korea, was promoted to president. The assessment is that a "brother management" system is becoming a reality, as the two oversee global business and digital and brand innovation, respectively.
Currently, Vice Chairman Hur and President Hur are leading the group by taking charge of overseas and domestic businesses, respectively. Vice Chairman Hur, as chief strategy officer (CSO) of Paris Croissant and head of the global business unit (BU), oversees the Paris Baguette global business. Serving as chair of the SPC change and innovation task force launched in July this year, Hur is also pushing group renewal efforts. President Hur, as chief vision officer (CVO) of BR Korea, is leading new businesses such as innovation and digital transformation of Baskin-Robbins and Dunkin, and the introduction of global brands.
Currently, Paris Croissant equity is 63.3% held by Chairman Hur Young-in, 3.5% by his spouse Lee Mi-hyang, 20.3% by Vice Chairman Hur Jin-soo, and 12.8% by President Hur Hee-soo, with the Oner family holding 100%. For a brother management system to take firm root, the two need to secure Chairman Hur's equity, but if it is simply gifted, an inheritance and gift tax rate of up to 60% applies. Taxes could run from hundreds of billions of won to the trillion-won range. The higher Paris Croissant's corporate value is assessed, the heavier the burden becomes.
With a physical split, a scenario emerges that can reduce this burden while strengthening control. If, after the partitioning, the surviving entity conducts a paid-in capital increase, the brothers can contribute their SPC Samlip equity in kind and be allotted new holding company shares. This approach is advantageous for succession because it allows them to expand their holding company equity without injecting cash directly. However, from the perspective of existing shareholders, there is concern about equity dilution due to the holding company's paid-in capital increase.
Another approach is an independent listing of the newly established business company. The business company, which holds major brands such as Paris Baguette and Pascucci, is likely to be recognized with a high corporate value upon listing. The funds raised can be used not only as resources for inheritance tax but also in future equity swaps or in-kind contributions, making it an effective means to expand control.
An industry official said, "If the surviving entity firmly takes on the role of a holding company, the group's strategic axis will be gathered in one place, and if the newly established business company succeeds in listing, a channel opens to secure succession resources," adding, "The overall governance of SPC will be reorganized around the third generation of the Oner family." Another official said, "With the brothers each responsible for global and innovation areas, the transition to a holding company structure also clarifies accountability and distributes authority," adding, "There is a possibility that business synergies among affiliates will be designed more elaborately going forward."
Meanwhile, along with the physical split, Paris Croissant is also proceeding with a merger with SPC, its 100% subsidiary. SPC is an affiliate responsible for common group functions such as legal affairs, public relations, and compliance, and will maintain the same functions after the merger. This is seen as a process of integrating key management functions ahead of the transition to a holding company.