Kim & Chang represented Binggrae in obtaining unconditional clearance from the Korea Fair Trade Commission (the “KFTC”) for the acquisition of 100% of shares in Haitai Ice Cream.
At the time, there were three major players in the Korean ice cream retail market, with Lotte (Lotte Confectionery and Lotte Foods) being the clear leader followed by Binggrae and Haitai Confectionary, which spun off its ice cream business as part of the proposed transaction in January 2, 2020, creating Haitai Ice Cream. This proposed acquisition of the third largest player by the second largest player meant that post-acquisition would leave only two major players competing in the relevant market, prompting the KFTC to conduct an extensive five-month review into the potential anti-competitive effects (e.g., price increases) which included multiple requests for information and economic analyses.
Our team of antitrust attorneys and economists worked closely to conduct in-depth economic analyses to effectively demonstrate that the proposed transaction would not raise prices, thereby addressing the KFTC’s initial concerns. Further, our team argued that the proposed transaction would not have any other anti-competitive impact on the market because (i) Lotte would maintain its dominant position in the market even after the proposed acquisition, (ii) the proposed acquisition aims to help Haitai, which had incurred operating losses for the past several years as the Korean ice cream retail market continued to diminish, to resume normal business activities, (iii) the acquisition would reinforce the companies’ competitiveness, particularly in foreign markets, and (iv) the increasing demand for foreign brands and specialty stores is a continuing source of competitive pressure on the market. Ultimately, the KFTC accepted our team’s arguments in full and decided to unconditionally clear the transaction.
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