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GS Retail offline logistics base, such as convenience stores
GS Home Shopping Combined Online Commerce
Improve delivery function and expand product with purchasing power
GS Retail CI will merge with GS Home Shopping.
GS Retail, which operates convenience stores and supermarkets, and GS Home Shopping, a mobile commerce and television home shopping operator, will be merged. With the rapid growth of online shopping markets such as Coupang and Naver, it is a strategy to significantly increase the purchasing power and competitiveness of the logistics network by combining online and offline distribution capabilities. Competition for survival is expected to develop in the commercial market, which recently places delivery infrastructure offline as a commercial stronghold, including the share exchange between CJ and Naver.
GS Retail and GS Home Shopping held a board meeting on the 10th and approved the merger plan. The surviving subsidiary after the merger is GS Retail, and the merger index is 1 to 4.22. For each GS Home Shopping share, 4.22 new GS Retail shares will be allocated. The two companies plan to close the merger in July next year after holding a general shareholders meeting after reviewing the business combination by authorities.
Summary of the merger transaction between GS Retail and GS Home Shopping
| division | Content | Observation |
|---|---|---|
| Surviving company | GS Retail Inc. | Form of merger: GS Retail merges with GS Home Shopping |
| Mission of the merged corporation | GS Retail Inc. | Kept the brand GS25, GS SHOP |
| Melt rate | 1: 4.22 | Base Market Price (Base Share Price): GS Retail KRW 33,800, GS Home Shopping KRW 142,762 New shares of 4,2236834 GS Retail shares are issued per GS Home Shopping share |
| Merger of new shares | 27,717,922 shares | |
| Stock purchase claim price | GS Retail Co., Ltd. 34,125 KRW GS Home Shopping Co., Ltd. 138,855 won |
From the day before the resolution date of the board of directors approved for the merger, the closing price of the last two months, one month and one week is calculated based on the weighted average price of the shares. |
Recently, in the distribution market, competition is developing to combine offline stores and a dense logistics infrastructure with online shopping. Amazon, the largest online shopping center, is expanding offline stores such as Amazon Go and Amazon Fresh, and the Naver share exchange to use CJ Logistics’ logistics services also determines that the offline delivery infrastructure is necessary to Get an edge in the online trading market. Since it is in the same context that Coupang, which has grown from delivering rockets, is building distribution centers across the country investing hundreds of billions of dollars in them while running a deficit of more than 3 trillion won. .
When the merger is successful, GS Retail’s 15,000 convenience stores nationwide, 320 supermarkets, 6 hotels including Grand InterContinental, GS Home Shopping’s 30 million mobile shopping app users and furniture, will quickly secure 18 million of users. It’s done. It will become a large online and offline trading company with assets of 9 trillion won, an annual handling amount of 15 trillion won, and 6 million transactions per day.
As the size of the company and the customer base increases, the purchasing power (purchasing power) and the selling power (selling power) increase, which is advantageous for product diversification. Convenience stores and supermarkets are aiming for a digital transformation that combines the online commerce function of GS Home Shopping, while GS Home Shopping aims to improve business competitiveness with store networks and logistics infrastructure nationwide. GS Home Shopping food products are expected to be delivered the same day through GS Retail’s cold chain (low temperature distribution system), and services will be added that complement the home shopping business, which have strengths in the fashion, life and health categories, as well as convenience stores and supermarkets that have strengths in fresh food.
The merged corporation set a goal of achieving 25 trillion won in handling amount by 2025. It is also investing to develop online and offline integration capabilities. By combining information technology (IT) and data capabilities, the company will focus on finding future growth engines as it evolves into a complete business (packaging, delivery, inventory management, etc.).
After the board of directors, GS Retail Vice President Huh Yeon-soo said in a message from executives and staff members: “At a time when the business environment is more uncertain than ever and fierce competition is expected, Let’s work together to create greater customer value by joining the business capabilities of the two companies. ” I ask. GS Home Shopping President Kim Ho-sung said, “For 25 years, we have pioneered the TV home shopping market, popularizing multimedia shopping and moving into mobile commerce,” emphasizing that “DNA of executives and employees who embrace change and continue to innovate will expand on a broader basis. ” did.
Maeng Ha-kyung reporter [email protected]
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