Shinsegae estimated to acquire Lotte Department Store’s Centum City branch for around 200 billion won ... Book value: 205 billion won [fn Market Watch]

[Financial News] A credit rating agency has estimated that Shinsegae will acquire Lotte Department Store’s Busan Centum City branch for about 200 billion won. Lotte Shopping Co., Ltd.’s book value for the land and buildings is 205 billion won, differing from the 250 billion to 300 billion won reported as the amount offered by bidders in the final round when the sale was pursued in 2024, drawing attention to the actual transaction price.
According to NICE Investors Service on the 30th, Shinsegae’s acquisition price for Lotte Department Store’s Centum City branch is not expected to significantly exceed 200 billion won. Shinsegae signed an acquisition agreement with Lotte Shopping Co., Ltd. the previous day and submitted a business combination report to the Korea Fair Trade Commission. The actual acquisition price has not been disclosed.
Jeong Jin-won, a researcher at NICE Investors Service, said in a report that day, “The acquisition price is not expected to significantly exceed 200 billion won.” The assessment takes into account that, according to Lotte Shopping Co., Ltd.’s audit report, the Centum City branch’s book value totaled 205 billion won, comprising 142.4 billion won for the land and 62.6 billion won for the building, as well as bid amounts reported when the sale was pursued in 2024. However, the difference from past bid prices cannot be determined because the actual contract amount has not been disclosed.
The sales gap between the two stores is also substantial. Last year, Shinsegae Centum City Department Store recorded sales of 2.2642 trillion won, ranking third nationwide, while Lotte Department Store’s Centum City branch posted 135.2 billion won, ranking 62nd. Shinsegae’s sales were about 16.7 times Lotte’s.
Shinsegae plans to improve operational efficiency by connecting the acquired Lotte store to its existing Centum City branch. It also plans to create a mixed-use commercial district combining shopping, office, lodging and residential functions, in conjunction with development of the nearby Centum City C site, where construction is scheduled to begin in the second half of 2027.
NICE Investors Service assessed that the transaction would have a limited impact on the credit ratings of Shinsegae and Lotte Shopping Co., Ltd. As of the end of June this year, Shinsegae held about 1 trillion won in cash and cash equivalents on a consolidated basis, and its debt ratio stood at 121.2%.
Researcher Jeong said, “Given Shinsegae’s cash-generating capacity, financial stability and expected acquisition price, the impact on its credit rating will be limited.” NICE Investors Service also judged that the sale proceeds would not have a significant impact on Lotte Shopping Co., Ltd.’s credit rating.
However, the additional investment burden from Shinsegae’s store renovations and mixed-use development of the Centum City C site remains a factor to watch. NICE Investors Service said it would continue to monitor the investment burden from renovations and mixed-use development following the acquisition.

[email protected] Kim Hyun-jung Reporter