South Korea's corporate regulator on Wednesday conditionally approved E.Land Corp.'s purchase of French retailer Carrefour's local operations.
The decision by the Fair Trade Commission (FTC) calls for three stores belonging to the merged company to be sold to a third party within six months of the takeover to negate concerns of excessive market concentration. This could lead to a rise in prices that could hurt consumers.
The three stores cited must be those in Seongnam, south of Seoul, Anyang-Gunpo in Gyeonggi Province, and Suncheon in South Jeolla Province.
The purchase of Carrefour, the country's fourth-largest retailer, will officially be made by E.Land Retails, a company set up specifically to buy Carrefour, and an affiliate of Fine Capital Corporation. The FTC's decision-making body had debated Carrefour's sale late last month, but postponed it.
"The FTC reached its decision because E.Land was not one of the top three players in the retail store market last year, and because it pledged to operate all stores without changing the type of products sold," said an FTC spokesman.
E.Land already operates the 2001 Outlet stores and New Core Co., but neither is a dominant force in the local retail market The FTC approval is expected to have an impact on the domestic market, where local retailers like E-mart and Lottemart are locked in a fierce battle to expand their respective market shares.
E.Land announced in April that it wanted to buy Carrefour Korea Ltd. for 1.75 trillion won (US$1.82 billion).
Carrefour SA, meanwhile, said it wants to sell all 32 local stores and exit the country. It has been struggling to attract consumers ever since Carrefour Korea opened its first store in 1996.
Seoul, Sept. 13 (Yonhap News)
Corporate regulator conditionally approves Carrefour sale |
