In a sign of changing times in Korea, KT Corp., a company best known for its telecom business, has sold its car rental business to the unlisted Hotel Lotte Co. Ltd., a company controlled by Lotte Group. The publicly reported acquisition price is over US$900 million.
Lotte is a leading Korean-Japanese hotel company with its hands into about everything imaginable including construction, retail, textile, food products, beverages, oil & gas and entertainment. However, it competitive advantage is in retail shopping and the hotel business.
KT is the former national telecom and, now, a leading player in both fixed and mobile telecommunication. Yes, I also question why a telephone company would own a car rental company. The answer lies, often, in the excessive need for conglomerates to grow their ranks of buildings, employees and news headlines. Often the reason for business lines being formed outside of the competitive advantage of the Korean company is ego. The situation, often, leads to dreadful failures. For example, Samsung formed an automobile company that, quickly, went bankrupt and was bought by Renault for a song and a dance.
We believe we will see may consolidations over the next couple of years with opportunities for purchasers from abroad to, also, purchase companies for a song and a dance.
Other articles related to M & As, Attorneys and Forming a Company in Korea that may be of interest:
- Mergers & Acquisitions Due Diligence Checklist
- Tax Qualified Mergers in Korea
- Korea M & A Basics
- Partner & Joint Ventures in Korea
- Minority Squeeze-outs in Korea
- Korean M & A Basics
- Korean Due Diligence Check List
- Joint Venture/Partnerships in South Korea
- Test the Korean Waters and Then Hit China
- Due Diligence in Korea
- New Corporate Forms in Korea
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.
Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw.
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