MEGA MGC COFFEE, the No. 1 low-cost coffee franchise, has jumped into the bidding to acquire Homeplus Express. Because it is moving to secure an offline retail channel with little overlap with its coffee business, the industry is focusing on the background. Some see it as a strategic move beyond simple scale expansion, while others worry it is an overreach given its business structure.
According to the retail industry on the 3rd, two parties are said to have submitted letters of intent (LOIs) recently for the sale of Homeplus Express. Samil PwC, the sale manager, is said to have taken the position that even corporations that did not previously submit an LOI can join due diligence after the notice and enter the main bid on the 21st. One of the parties that already joined is known to be MGC Global, which operates MEGA MGC COFFEE. MGC Global is keeping silent about why it joined the acquisition race and its plans after an acquisition.
Homeplus Express has 293 stores nationwide. Of these, about 200 stores are used as quick-commerce hubs (delivery within 1–2 hours after ordering). Annual sales are about 1.1 trillion won. However, after undergoing rehabilitation and other procedures, its corporate value has fallen to around 300 billion won.
The largest shareholder of MGC Global is Wooyoon Partners, founded by Chair and CEO Kim Dae-young of food distribution company BoraTR. In 2021, together with private equity firm Premier Partners, it invested 140 billion won at a 5:5 ratio to acquire N House, the predecessor of MGC Global. After MGC Global repaid all of Premier Partners' investment last year, the company shifted to a sole-management system under Chair Kim.
The industry is split between expectations and concerns. Some interpret MEGA MGC COFFEE's latest move as an extension of its "distribution business expansion." That is because, with Wooyoon Partners as the largest shareholder of MGC Global, BoraTR and MEGA MGC COFFEE are effectively under the same governance structure. BoraTR imports more than 700 types of ingredients from over 90 overseas food companies in Italy, Greece, Spain, France and elsewhere, and supplies them to about 1,900 clients in Korea. Last year, it posted sales of 102.3 billion won and operating profit of 9.1 billion won.
◇ possibility of expansion from coffee into distribution
Given this structure, MEGA MGC COFFEE's participation in the acquisition race may be an attempt to build a "value chain" that extends beyond merely securing a sales channel to cover everything from ingredient sourcing to distribution and retail. A retail industry official said, "If the nationwide Homeplus Express store network is used as urban logistics hubs, food ingredient distribution can expand its business scope from B2B (business-to-business transactions) to B2C (business-to-consumer transactions)," adding, "The aim is to secure Homeplus Co.'s distribution network and pursue strategic vertical integration."
Some in the industry also mention the possibility of expansion in a "shop-in-shop" format. Examples include setting up a separate sales space inside stores using BoraTR's premium ingredients, or combining differentiated food and beverage content with existing Homeplus Co. stores.
Currently, MEGA MGC COFFEE has secured both profitability and growth, laying the groundwork for aggressive expansion. In 2024, MEGA MGC COFFEE posted sales of 496 billion won and operating profit of 107.6 billion won, up 34.6% and 55.1%, respectively, from the previous year.
◇ a business structure entirely different from a coffee franchise
However, there are considerable risks stemming from differences in business structure. While MEGA MGC COFFEE rapidly expanded its store count with a light, franchise-centered model and secured profitability, the corporate supermarket (SSM) model that defines Homeplus Express relies heavily on directly operated stores and bears high fixed costs such as labor and rent. With numerous tasks to solve at once—store operations, logistics systems, workforce succession, inventory management—some warn that if it is run as a franchise in the same way as before, the profit structure could collapse rapidly.
Moreover, in the retail industry, there is a view that mergers and acquisitions (M&A) across different sectors rarely deliver the expected results. A representative example is Oasis Market, a fresh-food dawn-delivery specialist corporation, which acquired the e-commerce platform Tmon but has struggled to this day with brand realignment and restoring normal service.
A retail industry official said, "For MEGA MGC COFFEE, it is an opportunity to secure a store network and logistics hubs at once," but added, "However, because the business structure and operating methods are entirely different, the overall operating system must be redesigned, making execution highly challenging."
Seo Yong-gu, a professor of business administration at Sookmyung Women's University, said, "As the coffee market enters a saturation phase, they appear to have sought a foundation to create a new revenue model based on the judgment that business diversification is necessary," adding, "If an acquisition happens, actual results will depend on how they design and execute the revenue model built on distribution capabilities."