Chung Yong-jin, chairman of Shinsegae Group, recently announced that he will purchase all of the 10% equity in Emart held by his mother, Lee Myung-hee, who is the general chairperson of Shinsegae Group. This has been interpreted as a move to reorganize equity for the separation of Emart and Shinsegae.
Attention is focused on whether Chung Yoo-kyung, chairman and Chung Yong-jin's sister, will also purchase the 10% Shinsegae equity held by the general chairperson.
According to industry sources on the 14th, there are growing observations that Chung Yoo-kyung may soon also purchase the general chairperson's Shinsegae equity.
On the 10th, Emart disclosed a transaction plan stating that Chung Yong-jin would acquire the 10% equity in Emart owned by the general chairperson. According to the report, Chung Yong-jin will buy 2,787,582 common shares (10%) of Emart, which the general chairperson owns, through off-hours trading from February 10 to March 11.
In transactions between family members, a 20% premium is added to the price per share. The price per share that Chung Yong-jin must pay is 76,800 won, which includes a 20% premium on the closing price of 64,000 won from the 9th, leading to a total amount of 214.1 billion won.
To finance this acquisition, Chung Yong-jin plans to utilize personal assets such as cash. After this equity acquisition is completed, his stake in Emart will rise to 28.56%. Currently, he holds an 18.56% equity in Emart.
A representative from Emart noted, "In an uncertain domestic and international environment, the chairman's use of personal assets to demonstrate a sense of responsibility and confidence in enhancing Emart's corporate value to the market is significant."
In this context, it is also speculated that Chung Yoo-kyung's acquisition of equity from the general chairperson is likely to follow soon.
Chung Yoo-kyung was promoted directly to chairman last October, skipping the vice chairman role. An industry insider stated, "The promotion directly to chairman was entirely due to Chung Yoo-kyung's will," adding that the succession work to showcase "Chung Yoo-kyung's Shinsegae" started in earnest at the end of last year, indicating that she would embark on the equity acquisition this year.
There is also a view that the timing of Chung Yoo-kyung's equity purchase will be similar to that of Chung Yong-jin.
Five years ago, the general chairperson's equity transfer to siblings Chung Yong-jin and Chung Yoo-kyung occurred simultaneously. In September 2020, the general chairperson gifted 8.22% of the Emart and Shinsegae equities he held to then Shinsegae Group Vice Chairman Chung Yong-jin and General Chairperson Chung Yoo-kyung, respectively.
Through this gift, Chung Yong-jin's equity in Emart increased from 10.34% to 18.56%, and Chung Yoo-kyung's equity in Shinsegae also rose from 10.34% to 18.56%. Both became the largest shareholders.
This is interpreted as the starting point of a family equity reorganization aimed at the separation of Emart and Shinsegae under Shinsegae Group. For legal separation, family equity rearrangement must precede.
An industry representative commented, "This is a movement toward clarifying independent lines such as 'Chung Yong-jin's Emart' and 'Chung Yoo-kyung's Shinsegae,' rather than just Shinsegae Group's Emart and Shinsegae," adding that "General Chairperson Lee Myung-hee has also supported the siblings' respective management successions."
Shinsegae Group has been operating as a holding company for both Emart and Shinsegae since Emart was partitioned into a separate corporation in 2011. After Chung Yong-jin was promoted from Vice Chairman to Chairman of Shinsegae Group in March last year, and Chung Yoo-kyung was also promoted from General Chairperson of Shinsegae to Chairman in October last year, the formal separation of Emart and Shinsegae was established.
If Chung Yoo-kyung directly acquires the equity from the general chairperson like Chung Yong-jin, it is expected that she will need to invest over 150 billion won. According to Shinsegae's business report, the 10% equity that the general chairperson holds translates to 989,451 shares of Shinsegae common stock. Given the 20% premium applied for a family transaction, it will require approximately 150 to 155 billion won to purchase all shares. A representative from Shinsegae stated, "There are no confirmed details yet."
An industry representative noted, "Chung Yoo-kyung's business capabilities have been somewhat proven, whether it's making Shinsegae Department Store a landmark or strengthening core business competitiveness," suggesting that there is a high possibility of acquisition as soon as funds are secured.
However, the actual separation of Emart and Shinsegae will take more time. For Shinsegae Group to achieve a complete separation, it must undergo a scrutiny process from the Fair Trade Commission.
Typically, the Fair Trade Commission's separation review takes a minimum of several months. Once approved officially by the commission, the procedure is concluded, and Emart and Shinsegae will be subject to separate corporate group regulations.