Doosan Corp., the de facto holding company of Doosan Group, said Thursday that it signed a share purchase agreement with CVC Capital Partners, a European private equity firm, to sell its KFC franchise in Korea.
“Under the agreement, the group sold its entire 100 percent stake in SRS Korea, an affiliate of Doosan and the operator of the KFC chain in Korea, to CVC for 100 billion won ($97.8 million),” the company said in a press release.
With the move, Doosan, once a beverage and food giant in Korea, walked away from its food service business. The group has sought the sale of KFC to complete its transformation into a heavy industries-driven conglomerate. KFC was the last consumer business unit of Doosan.
Doosan has spurred efforts to close its remaining noncore consumer goods businesses since 2010. In 2012, it sold its Burger King franchise to Vogo Fund, a local leading private equity fund, for 110 billion won ($107.6 million), following the sale of its bottle cap maker Samhwa Crown & Closure to Kumbi Cosmetics in 2010.
The group said it will drive its repositioning initiative to build a reputation as a global “infrastructure support business” group, following the closure of KFC.
The shift of Doosan in its core businesses kicked off in 1995, when the group turned 100 years old, in the course of reviewing the future of the group.
Under the vision of becoming a heavy industry-driven conglomerate, Doosan started selling off its core consumer goods businesses, including Oriental Brewery, from the late 1990s. Instead, it took over faltering heavy industries giants at home and abroad, including Hankook Heavy Industries and Construction (currently Doosan Heavy Industries & Construction) in 2001 and U.K.-based Babcock in 2006.
In 2013, Doosan Group was the 12th largest conglomerate in Korea with 2.9 trillion won in assets.
By Seo Jee-yeon (firstname.lastname@example.org)