Hanwha Galleria Corp., a South Korean department store operator, signed a memorandum of understanding early this month to buy a domestic non-alcoholic beverage company Pure Plus Co. for about 20 billion won ($15 million), according to people familiar with the matter on Monday.
The acquisition is expected to diversify the retail company into the food and beverage market, in which it is looking into other M&As, said the sources.
The unit of chemicals-to-defense conglomerate Hanwha Group is slated to sign a definitive agreement by the end of June to acquire the entire stake in the unlisted beverage company.
The shares it is buying include a 53% stake owned by Pure Plus Chief Executive Park Hun-shik and a 7% stake from the Korea SMEs and Startups Agency.
Founded in 1986, Pure Plus makes organic and healthy drinks and coffee, as well as fruit and vegetable juices. It supplies them to retailers, including big-box supermarket chains such as Costco and HomePlus, through its over 300 sales networks.
In addition to private label products, it makes drinks for other brands as an original equipment or original development manufacturer.
Its corporate customers include Lotte Chilsung Beverage Co., Chongkundang Healthcare Co. and pharmaceutical company Kwangdong Co.
In 2023, operating profit at Pure Plus quadrupled to 1.6 billion won from 400 million won the year prior. Sales dipped to 40.9 billion won, versus 44.3 billion won in 2022.
Hanwha derives 93.4% of its revenue from department stores, with food and beverages making up the remaining 6.6%.
Kim Dong-seon, the third and youngest son of Hanwha Group Chairman Kim Seung-yeon, leads the group’s retail and leisure business, including Hanwha Hotels & Resorts Co.
Last year, Hanwha Galleria established a wine business subsidiary in June and obtained exclusive domestic sales rights to Five Guys, one of the three most popular US burger chains, in October.
Write to Ji-Eun Ha at hazzys@hankyung.com
Yeonhee Kim edited this article.
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