CVC buys KFC Korea franchise

Doosan announced in a regulatory filing that its subsidiary, DIP Holdings, would exit a 100% interest in the asset to a CVC-owned vehicle Restaurant Investments Asia. It continues the trend of divestments by Korean conglomerates that are under a combination of political and financial pressure to focus on their core businesses.

Doosan's strategic shift actually dates back to the early 2000s when Korea was still grappling with the IMF crisis and consumption had nosedived. It was once primarily a food and beverage conglomerate, with assets including Oriental Brewery, Coca-Cola Korea, a prepackaged food business and some restaurant chains. Oriental Brewery and Coca-Cola Korea were the first to be sold. The proceeds were used to pay down debt and refocus on heavy industry.

Until about 18 months ago, the only food and beverage businesses left in Doosan's portfolio were the domestic Burger King and KFC franchises. Burger King was sold to Vogo Investment and now CVC has picked up KFC.

The private equity firm already holds an interest in the KFC franchise in Malaysia. It partnered with Johor Corp. and Employees' Provident Fund to buy QSR Brands and its subsidiary KFC Holdings Malaysia through a MYR5.12 billion ($1.7 billion) privatization. The deal closed in January 2013.

In recent months, CVC has also made two restaurant acquisitions in China, picking up controlling stakes in South Beauty, which specializes in Sichuan cuisine, and quick service restaurant operator Da Niang Dumpling Holdings.

CVC has been raising its fourth pan-Asian fund. The vehicle has a hard cap of $3.5 billion, including a $200 million GP commitment, although this may well be exceeded.

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• Topics
• North Asia
• Consumer
• Buyouts
• buyout
• CVC Capital Partners
• South Korea
• Consumer