Lotte wins approval from merger review body for LOTTE rental sale; deal to be completed by October

[Financial News] Lotte Group has received approval from the merger review body for the sale of its stake in LOTTE rental held by Hotel Lotte and Lotte Hotel Busan. The group plans to complete the transaction by October after going through follow-up procedures, including a shareholders' meeting.
According to the industry on the 1st, Lotte Group signed a deal last month on the 11th to sell a 61.2% controlling stake in LOTTE rental to global investment firm TPG. The sale covers Hotel Lotte's 38.1% stake and Lotte Hotel Busan's 23.0% stake, with the price 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 contract, the company went through the merger review process and has now received the relevant approval.
Lotte Group plans to use the proceeds from the sale to improve the financial soundness of Hotel Lotte and Lotte Hotel Busan and strengthen their business competitiveness. Hotel Lotte posted operating profit of 135.6 billion won in the first half of this year, tripling from a year earlier, helped by an increase in foreign tourists.
The company expects the reduced debt burden from supporting affiliates to lower funding costs and expand investment capacity. Lotte plans to channel the funds into renovating key domestic locations and strengthening its premium brand operations to improve the profitability of its hotel business.
At the same time, Lotte Group is accelerating the restructuring of its business portfolio by trimming non-core businesses and improving asset efficiency. This year, the group has secured about 1.7 trillion won through asset and stake sales.
Recent examples of non-core asset sales include LOTTE rental, as well as LOTTE Energy Materials' May deal to sell a 90% stake in its subsidiary Lotte Eco Wall for 170.8 billion won.
The sale of idle assets has also continued. Lotte Shopping and Lotte Wellfood sold the Bundang logistics center for 131.1 billion won, while FRESH 365 disposed of its Kintex branch for 82 billion won. LOTTE-Nestle (Korea) also sold its Cheongju plant and land for 34.7 billion won, bringing Lotte's total asset and stake sale transactions this year to more than 1.73 trillion won.
Lotte Chemical is also moving quickly to strengthen its long-term competitiveness through business restructuring. After completing a spin-off process in June, the Lotte Chemical Daesan Petrochemical plant merged with HD HYUNDAI CHEMICAL on the day and relaunched as the integrated company H&L Advanced. It is the first case in which a business restructuring promoted by the petrochemical industry and the government has led to a merger between companies.
A Lotte official said, "With improved first-half results at major affiliates and the approval of this LOTTE rental sale, we expect the group's profitability and financial soundness to rise significantly." The official added, "In the second half of the year, we plan to speed up restructuring through the sale of non-core businesses and idle assets."
[email protected] Jang Yu-ha Reporter