The Korea Fair Trade Commission said on the 26th that it disallowed the corporate combination of Lotte Rental and SK Rent-a-Car, the No. 1 and No. 2 players in the domestic rental car market. It judged that if the two companies combined, competition in the rental car market would be restricted, raising serious concerns about consumer harm such as fare hikes.
The decision came after private equity fund Affinity filed a merger notification during the process of acquiring Lotte Rental while already owning SK Rent-a-Car, which the Korea Fair Trade Commission (FTC) reviewed. With the FTC's decision to disallow the corporate combination, Affinity's acquisition of Lotte Rental has fallen through.
The Korea Fair Trade Commission (FTC)'s review of corporate combinations is based on whether competition is restricted in a specific market, causing consumer harm. In this case, the FTC assessed the rental car market by dividing it into a short-term market with vehicle lending periods of less than one year and a long-term market of one year or more.
The "short-term rental car market" refers to the market where consumers, mainly those on business trips or traveling, rent vehicles. The FTC viewed this market as partitioning into the mainland and Jeju. The combined market share of Lotte Rental and SK Rent-a-Car was 29.3% on the mainland (as of the end of 2024) and 21.3% in Jeju. In both the mainland and Jeju, the market share of companies ranked third and below ranged from less than 1% to at most 4%.
On this, the Korea Fair Trade Commission (FTC) said that allowing the corporate combination of Lotte Rental and SK Rent-a-Car would deepen an "overwhelming single large conglomerate versus numerous small and mid-sized companies structure," adding that side effects such as fare hikes would be significant and that as the exit of small and mid-sized operators accelerates, the position of the overwhelming No. 1 conglomerate would be further strengthened.
The FTC also judged that in the "long-term rental car market," competition among companies would be weakened in a similar way, pushing up usage fees. This is because the combined market share of Lotte Rental and SK Rent-a-Car would rise to 38.3%, exceeding the combined share of the companies ranked No. 2 through No. 7.
Accordingly, the FTC decided to prohibit Affinity from acquiring a 63.5% stake in Lotte Rental. An FTC official said that even with measures such as restricting price increases, it determined that the competition-restricting problems arising from the corporate combination of Lotte Rental and SK Rent-a-Car could not be corrected. It was said that this took into account the characteristics of private equity funds, which execute a corporate combination and then, after a certain period, sell to realize gains.