Customers line up outside a Five Guys store near Seoul Station. (FG Korea)
Customers line up outside a Five Guys store near Seoul Station. (FG Korea)

Hanwha Galleria, the retail arm of Hanwha Group, said it is selling FG Korea, the operator of US burger chain Five Guys in South Korea, to a local private equity firm, just five months after initiating its search for potential buyers.

In a regulatory filing Wednesday, the company said it had signed a memorandum of understanding with H&Q Equity Partners regarding the sale of its stake in FG Korea. The transaction remains subject to further due diligence.

“Among several interested parties, H&Q stood out for its strong commitment and its assessment of Five Guys Korea’s performance and growth prospects,” a Hanwha Galleria official said, adding that the sale would sharpen its focus on core retail operations, including department stores.

While key terms, including the transaction value, have yet to be finalized and could change during negotiations, investment banking sources estimate the deal at about 60 billion to 70 billion won ($40.5 million to $47.3 million).

If confirmed, the transaction would deliver a more than threefold return on Hanwha Galleria’s roughly 20 billion won investment made in June 2023, when Vice President Kim Dong-seon led the brand’s entry into Korea.

FG Korea reported revenue of 46.5 billion won last year and posted an operating profit of 3.4 billion won, swinging to profitability.


minmin@heraldcorp.com