Mom’s Touch, Lotte Card draw renewed M&A interest

Two of South Korea’s major acquisition targets, fast-food chain Mom’s Touch and credit card issuer Lotte Card, are heading into competitive sale processes in November, with combined valuations approaching 3 trillion won ($2.25 billion).By Park Je-one and Minu Kim

Both companies have failed to find buyers in previous attempts, raising questions about whether their private equity owners can secure deals amid renewed investor interest and lingering concerns over valuations and regulatory risks.

According to investment banking sources, KL & Partners completed preliminary bidding for Mom’s Touch in late October, working with Citigroup Global Markets as sale adviser. The domestic private equity firm plans to select a shortlist of bidders, conduct due diligence and proceed to final bidding.

The sale covers a 100 percent stake in Mom’s Touch & Co., held through Korea F&B Holdings, a special-purpose company controlled by KL & Partners. The seller is seeking a valuation of approximately 1 trillion won.

Mom’s Touch reported record revenue of 479 billion won and operating profit of 89.7 billion won last year, with an operating margin of 18.7 percent. Earnings before interest, taxes, depreciation and amortization (EBITDA) exceeded 100 billion won.

KL & Partners acquired Mom’s Touch in 2019 and first attempted to sell it in 2022, but failed to attract buyers willing to meet its valuation expectations. Interested parties at the time included PAG, Goldman Sachs’ principal investment arm and U.S. restaurant operator Yum! Brands.

This time, major South Korean retailers are also reportedly showing interest, potentially broadening the pool of strategic buyers.

Prospective bidders, however, are expected to scrutinize the chain’s franchise business model. About 95 percent of last year’s operating profit, or 85.3 billion won, came from supplying products and ingredients to franchisees.

Changes to franchise regulations, including stronger rights for franchisee associations to negotiate business terms with franchisors from late this year, could affect future profitability.

The final valuation of Mom’s Touch may also serve as a benchmark for the potential sale of BKR, the South Korean operator of Burger King, which could enter negotiations toward year-end.

Meanwhile, Lotte Card is also expected to begin a formal bidding process in November, with UBS advising its controlling shareholder, MBK Partners.

The private equity firm distributed preliminary sale materials to prospective buyers in August. Lotte Card is now valued at around 2 trillion won, down from earlier expectations of as much as 3 trillion won.

The proposed transaction involves a combined 79.83 percent stake, comprising 59.83 percent held by MBK through Korea Retail Card Holdings and 20 percent owned by Woori Bank. Lotte Shopping’s remaining 20 percent stake is not included.

MBK and Woori Bank acquired their holdings for 1.38 trillion won in 2019.

The latest sale would mark MBK’s third attempt to exit the investment. An initial process launched in 2022 with JPMorgan failed over disagreements on price. Another attempt, revived in late 2024 with UBS, was suspended following a customer data breach in September 2025.

Regulatory uncertainty has since eased after South Korea’s Financial Services Commission imposed a 45-day business suspension from Aug. 1 through Sept. 15. Lotte Card resumed operations on Sept. 16.

The company reported first-half consolidated net profit of 64.7 billion won, up 55.5 percent from a year earlier.

Despite the earnings improvement, potential buyers among South Korea’s financial holding companies remain cautious.

Woori Financial Group, which already has an indirect interest through Woori Bank’s 20 percent stake, faces questions over how much additional capital it can commit to a major acquisition after purchasing Tongyang Life Insurance and ABL Life Insurance.