South Korea’s Hyundai Department Store Group has agreed to buy SK Networks Co.’s fashion business division for about 330 billion won ($284.5 million), emerging as the nation’s leading fashion group with more than 1 trillion won in annual sales.

According to multiple sources from the retail and investment bank industry on Thursday, Hyundai Department Store and SK Networks, trading unit of SK Group, each held a board of directors meeting and voted in favor of the asset purchase agreement. The total acquisition value is estimated to be about 340 billion won including debts or 330 billion won without debts. The purchase is expected to be completed in January or February next year.

Following the deal, Hyundai Department Store Group is expected to position itself as the country’s fashion mogul with more than 1 trillion won annual sales. It already owned another fashion unit Handsome, a high-quality women’s apparel brand that it acquired in 2012 to expand its presence in the local fashion market. The latest acquisition comes at a time when the group is going all out for exploring future growth engines amid sluggish growth in the retail sector.

By selling off its fashion business, SK Networks is expected to concentrate more fully on rental and duty free businesses. It has recently acquired home appliances manufacturing and renting company Tongyang Magic Inc. for 610 billion won.

Hyundai Department Store and SK Networks are known to have been in the tug-of-war negotiations to narrow down differences in terms and conditions of the deal before reaching an agreement early in the morning on Thursday. Banking giant Credit Suisse and the country’s largest law firm Kim & Chang, respectively, were financial and legal advisers for SK Networks, while Bae, Kim & Lee LLC advised on the deal for Hyundai Department Store.

By Kang Doo-soon

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