[Aju News DB]
CJ Group, a food and entertainment conglomerate, said Wednesday it has jumped into the race to buy or jointly run the South Korean unit of US iconic fast food chain McDonald's which has seen its business shrinking due to tough competition with a number of local and foreign chains.
In a regulatory briefing, the group said it has submitted a letter of intent to the American headquarters of the world's largest fast food restaurant chain. Details were not disclosed but there have been unconfirmed reports the deal could fetch up to 500 billion won (427 million US dollars).
McDonald's has struggled to reorganize its operations in East Asia by looking for local partners to run its outlets as franchise stores in return for commissions. There are more than 400 McDonald's stores in South Korea.
McDonald's entered the South Korean market in 1988 but closed its first outlet here in Seoul in 2007 and the second in March this year. Many McDonald's outlets abroad are now managed through franchises or joint partnership, but all its stores in South Korea are directly managed.
Many McDonald's outlets abroad are now managed through franchises or joint partnership, but all its stores in South Korea are directly managed.
For years, McDonald's Korea has tried to change its marketing strategy for its stable growth in South Korea. In February, it disclosed a pilot project to open its first store serving premium hamburgers and draft beer in Seongnam, a satellite city south of Seoul, for the first time in Asia.
McDonald's, which has already sold beer in Germany and France, hopes to open similar restaurants in other areas if the operation of its test store in Seongnam is successful. Recently it has increased the number of stores that offer Signature Burger and let consumers can choose their own ingredients to build a burger.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
