MEGA MGC COFFEE, the No. 1 low-priced coffee franchise, has jumped into the race to acquire Homeplus Co. Express. As it moves to secure an offline retail channel with little overlap with its coffee business, the industry is watching for the rationale. Some see it as a strategic step beyond simple scale expansion, while others worry it is a risky bet given the business structure.
According to the retail industry on the 3rd, two bidders reportedly submitted letters of intent (LOIs) for the sale of Homeplus Co. Express. Samil PwC, the sale manager, is said to allow corporations that did not previously submit an LOI to join due diligence after the notice and enter the main bid on the 21st. One of the participants is known to be MGC Global, which operates Mega Coffee. MGC Global is keeping quiet about why it entered the bid and its plans after an acquisition.
Homeplus Co. Express has 293 stores nationwide. Of these, about 200 are being used as quick commerce hubs (delivery within 1–2 hours after order). Annual sales are about 1.1 trillion won. However, after rehabilitation proceedings, the corporate value has fallen to about 300 billion won.
The largest shareholder of MGC Global is Wooyoon Partners, founded by Chairman and CEO Kim Dae-young of food materials distribution company BoraTR. In 2021, together with private equity firm Premier Partners, it invested 140 billion won at a 5-to-5 ratio to acquire Andhouse, the predecessor of MGC Global. After MGC Global repaid all of Premier Partners' investment last year, the company shifted to sole management under Chairman Kim.
The industry is split between expectations and concerns. Some interpret Mega Coffee's move as an extension of "distribution business expansion." That is because Wooyoon Partners is the largest shareholder of MGC Global, effectively placing BoraTR and Mega Coffee under the same governance structure. BoraTR imports more than 700 types of food ingredients from over 90 overseas food companies in Italy, Greece, Spain, France and elsewhere, and supplies them to about 1,900 domestic clients. Last year it posted 102.3 billion won in sales and 9.1 billion won in operating profit.
◇ Possibility of expansion beyond coffee into distribution
Given this structure, Mega Coffee's participation in the acquisition race could be an attempt to build a value chain that extends from sourcing ingredients to distribution and sales, beyond simply securing a retail channel. A retail industry official said, "If the nationwide Homeplus Co. Express store network is used as urban logistics hubs, food ingredient distribution could expand its business scope from B2B (business-to-business) to B2C (business-to-consumer)," adding, "The goal is to secure Homeplus' distribution network and attempt strategic vertical integration."
Some in the industry also mention the possibility of "shop-in-shop" expansion. This could involve setting up dedicated sales spaces in stores using premium ingredients held by BoraTR, or combining differentiated food and beverage content within existing Homeplus Co. Express locations.
Mega Coffee has secured both profitability and growth, laying the groundwork for aggressive expansion. In 2024, Mega Coffee recorded 496 billion won in sales and 107.6 billion won in operating profit, up 34.6% and 55.1% from the previous year, respectively.
◇ A business structure entirely different from a coffee franchise
However, there are significant risks stemming from differences in business structure. While Mega Coffee rapidly expanded stores with a light, franchisee-centered model to secure profitability, Homeplus Co. Express, an SSM (super supermarket), has a high proportion of directly operated stores and heavy fixed costs such as labor and rent. With numerous simultaneous challenges—store operations, logistics systems, staff succession, inventory management—analysts warn that if it is run exactly like an existing franchise, its profit structure could collapse rapidly.
The retail industry also notes that mergers and acquisitions across disparate sectors often fail to meet expectations. A representative example cited is fresh-food dawn-delivery company Oasis Market acquiring the e-commerce platform Tmon, only to struggle to this day in retooling the brand and normalizing services.
A retail industry official said, "For Mega Coffee, it is an opportunity to secure a store network and logistics hubs at once," but added, "Because the business structure and operating method are entirely different and the overall operating system must be rebuilt, the execution difficulty will be high."
Seo Yong-gu, a professor of business administration at Sookmyung Women's University, said, "As the coffee market enters a saturation phase, it appears they sought a foundation to create a new revenue model based on the need to diversify," adding, "If the acquisition succeeds, outcomes will depend on how the revenue model is designed and executed."