Lotte has agreed to sell its management stake in Lotte Rental to global private equity firm TPG for 1.31 trillion won. This move is expected to accelerate the group's portfolio restructuring.
On August 11, Lotte announced it had signed a contract with TPG for the sale of its entire 61.2% stake in Lotte Rental, which is held by Hotel Lotte and Busan Lotte Hotel. Hotel Lotte owns 38.1% of the shares, while Busan Lotte Hotel holds 23.0%. The sale price is set at 59,000 won per share, totaling 1.31 trillion won.
Previously, Lotte had been negotiating with multiple potential buyers after its contract with the previous buyer, Affinity, ended in May. The company selected TPG as the final acquirer after a comprehensive review of the proposed corporate value, acquisition structure, employment guarantees, transaction completion likelihood, and funding capabilities.
TPG plans to enhance Lotte Rental's competitiveness and corporate value based on its investment experience in global mobility companies like Uber.
Lotte intends to use the proceeds from the sale to improve the financial health of Hotel Lotte and Busan Lotte Hotel and to invest in its core hotel business. With the increase in foreign tourist arrivals, the company aims to secure investment capacity to strengthen its global competitiveness.
The group also plans to pursue further business restructuring. Lotte has already begun asset efficiency efforts, including the sale of its subsidiary Lotte Energy Materials, Lotte Eco-Wall, in May, and Lotte Chemical has achieved a turnaround to profitability through production optimization.
A Lotte official stated, "We selected the acquirer after considering market conditions and our mid- to long-term growth strategy. We will focus more on strengthening the core business's fundamental competitiveness and enhancing our business portfolio."
The transaction is expected to be finalized after receiving approval from the Fair Trade Commission for the business combination.
* This article has been translated by AI.
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