The Korea Fair Trade Commission said on the 1st it will approve the acquisition of Lotte Rental, Korea's No. 1 rental car operator, by Texas Pacific Group (TPG), a global private equity fund. As a result, the entire 61.2% equity in Lotte Rental held by Hotel Lotte and Busan Lotte Hotel will be transferred to TPG.
When corporations acquire a large number of another company's shares through mergers and acquisitions in a way that could restrict competition in a specific market, they are subject to a business combination review by the Korea Fair Trade Commission (FTC). In this review, TPG received approval.
That day, the Korea Fair Trade Commission (FTC) said in a notice to the press corps, "Given the characteristics of the relevant markets, there is no complementarity or substitutability between TPG's domestic private investment market and domestic infant and toddler nutritional foods market, and Lotte Rental's domestic vehicle rental market," adding, "It is presumed there is no restriction of competition." Private equity fund TPG conducts a domestic infant and toddler nutritional foods business through its domestic affiliate HB F&B. The Korea Fair Trade Commission (FTC) determined there is no restriction of competition because TPG's existing business is far from the rental car business it seeks to acquire.
Initially, Lotte Rental was to be acquired by Affinity Equity Partners (hereafter Affinity), a global private equity fund. However, in Jan. this year, the Korea Fair Trade Commission (FTC) disallowed the deal, finding that if Affinity, which already owns SK Rent-a-Car, also acquired Lotte Rental, there would be a high risk of restricting competition in the rental car market. With the latest decision by the Korea Fair Trade Commission (FTC), Lotte Rental will be transferred to TPG, not Affinity.