Merger Review on the 1st notified its approval of Lexicon Korea Holdco's acquisition of shares in LOTTE rental Co., Ltd., a company under the U.S.-based global private equity fund TPG.
Lotte Group signed an agreement with TPG on the 11th of last month to sell a 61.2% controlling stake in LOTTE rental Co., Ltd. The assets to be sold include Hotel Lotte Co., Ltd.'s 38.1% stake and Lotte Hotel Busan's 23.0% stake. The sale price was set at 59,000 won per share, or 1.3105 trillion won in total. Lotte Group selected TPG as the buyer after a comprehensive review of corporate value, acquisition structure, employment guarantees and the speed of closing. After signing the deal, the company underwent merger review and has now received approval.
Merger Review determined that TPG, which is engaged in private equity investment and infant nutrition products, and LOTTE rental Co., Ltd., which operates a vehicle rental business, are in completely different business areas and therefore pose no risk of restricting competition.
Accordingly, Lotte Group plans to complete the transaction within October after going through follow-up procedures such as a shareholders' meeting.
Lotte Group will use the proceeds to improve the financial soundness of Hotel Lotte Co., Ltd. and Lotte Hotel Busan and to strengthen their business competitiveness. Hotel Lotte Co., Ltd. posted operating profit of 135.6 billion won in the first half, three times higher than a year earlier, helped by an increase in foreign tourists. Lotte Group plans to allocate the funds it secures to renovating domestic flagship locations and strengthening premium brand operations to improve the hotel business's profit structure.
At the same time, Lotte Group is moving quickly to restructure its portfolio by shedding non-core businesses and improving asset efficiency. This year, the group has secured about 1.7 trillion won through asset and equity sales.
Among the non-core business sales, Lotte Energy Materials signed a deal in May to sell a 90% stake in its subsidiary Lotte Eco Wall for 170.8 billion won, in addition to the Lotte Rental transaction. Sales of idle assets have also continued. Lotte Shopping Co., Ltd. and Lotte Wellfood Co., Ltd. sold the Bundang logistics center for 131.1 billion won, while FRESH 365 sold the Kintex branch for 82 billion won and LOTTE-Nestle (Korea) Co. Ltd. sold its Cheongju plant and land for 34.7 billion won, bringing this year's total transactions to more than 1.73 trillion won.
Lotte Chemical Corporation is also accelerating efforts to strengthen its long-term competitiveness through business restructuring. The Daesan Plant completed its split in June, and on September 1, the integrated company was launched under the name 'H&L Advanced' after merging with HD HYUNDAI CHEMICAL CO., LTD. The Yeosu Plant has also been in discussions with affiliates to build an integrated operating system since its business restructuring plan was approved in July.
A Lotte Group official said, "With improved first-half results at major affiliates and the approval of this sale of LOTTE rental Co., Ltd., we expect the group's profitability and financial soundness to improve significantly." The official added, "In the second half of the year, we will continue to speed up restructuring by selling non-core businesses and idle assets."
Sohyoung Kim compact@sportschosun.com
This article has been translated by GripLabs Mingo AI.
