Fair Trade Commission Approves TPG's Acquisition of Lotte Rental Shares: "No Competition Restriction"

The acquisition of shares in Lotte Rental, South Korea's top car rental operator, by the US-based global private equity firm (PEF) TPG (Texas Pacific Group) has been approved.

The Fair Trade Commission (FTC) announced today (Sept. 1) that it has issued a notice of approval for the acquisition of Lotte Rental shares by Lexicon Korea Holdco, an affiliate of TPG.

On August 11 of last year, the Lotte Group signed a management rights stake sale agreement with the global investment firm TPG regarding Lotte Rental.

The sale targets were the entire 61.2% stake held by Hotel Lotte and Busan Lotte Hotel (38.1% held by Hotel Lotte and 23.0% by Busan Lotte Hotel).

Following the agreement, a business combination was reported to the FTC in accordance with the Fair Trade Act.

Under the Fair Trade Act, the FTC is required to conduct a general review of business combinations when independent companies are integrated under a single control.

However, even if one company acquires shares in another, the case is excluded from the general review if the acquisition does not form a controlling relationship or if the complementarity and substitutability of business areas are weak, as it is deemed to pose no restriction on competition.

The FTC determined that there is no restriction on competition because the business areas of TPG and Lotte Rental are completely different.

While TPG mainly operates in the domestic private equity investment market and the domestic infant and toddler nutritional food market, Lotte Rental primarily operates in the domestic car rental market. Given the characteristics of the two markets, there is no complementarity or substitutability between them.

Previously, Lotte attempted to sell Lotte Rental to the global PEF Affinity Equity Partners last year, but the deal fell through in January of this year after failing to gain approval from the FTC.

At the time, the FTC concluded that if Affinity, which already owned SK Rent-a-Car, were to also acquire Lotte Rental, there would be significant concerns about restricting competition in both the short-term and long-term car rental markets.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.