Lotte buys Doosan's liquor unit for 503 bln won

SEOUL, Jan. 6 (Yonhap) -- Lotte Chilsung Beverage Co., a unit of Lotte Group, said Tuesday it has signed a formal deal to buy a liquor unit of Doosan Corp. for 503 billion won (US$383 million), a deal that helps spur Lotte's beverage business.

The deal is expected to help Lotte better compete with Hite Holdings Co., which
owns the nation's largest beer maker, Hite Brewery Co., and also the biggest soju
maker, Jinro Ltd.
Payment will be completed in February after a three-week due diligence, Lotte
said in a statement.
Jinro controls about half of the local market for soju, while Doosan holds a 15
percent share.
Soju, a liquor made from rice and other starches with an alcohol content of 20
percent, is popular among South Korean adults.
Doosan said its liquor unit posted 342 billion won in sales for soju, wine and
other liquors and 21.4 billion won in operating income in 2007.
Lotte Group, whose business portfolio ranges from retail, hotels and construction
to snack foods, has been seeking to boost its beverage business.
The group is also said to be as one of the stronger candidates in the bid to buy
Oriental Brewery, the nation's No. 2 beer company owned by Belgian brewer InBev
NV.
Meanwhile, Doosan said it will use the proceeds from the sale of assets to repay
debts. Last year, it sold its packaging unit, Doosan Techpack BG, to private
equity fund MBK Partners for 400 billion won to shore up its balance sheet.
Doosan Group is on the move to shift its focus from food and beverages to heavy
industries. Last year, its machinery unit bought Bobcat, the world's leading
compact construction equipment maker.
sam@yna.co.kr
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