KG Group acquires KFC Korea

Big fertilizer manufacturer KG Group is expected to take over KFC Korea, the U.S.-based fried chicken franchise brand’s unit here.

KG Group said it soon expects to sign a share purchase deal with CVC Capital Partners to take over its 100 percent stake in SRS Korea, the business operator of KFC Korea.

The deal will be finalized under Yum!Brands’ approval. Yum!Brands is the U.S. food chain’s parent group in Louisville, Kentucky.

Industry sources say the approval is expected to be concluded by the end of next week.

CVC Capital Partners named Deloitte Anjin as lead manager for the sale of the KFC local unit.

The sale price could be 50 billion won ($44 million), which is expected to be half the price CVC Capital Partners paid Doosan Group to acquire the fast-food chain in 2014.

KFC Korea’s operating profit shrank to 1.1 billion won in 2015 from 6.8 billion won in 2014 and 11.5 billion won in 2013 due to the rising popularity of local fried chicken brands.

Fried chicken in Korea is a popular delivery food or a side dish for beer, a major reason for shunning the U.S. fast-food chain.