Lotte Group pushing for takeovers amid global downturn

By Nam Kwang-sik
SEOUL, Jan. 8 (Yonhap) -- South Korea's Lotte Group is aggressively expanding
efforts to acquire blue-chip companies amid aggravating global economic
conditions, industry sources said Thursday.
The nation's fifth-largest family-run conglomerate raised about 1 trillion won
(US$800 million) via the sale of corporate bonds between September and October
last year in a bid to buy blue-chip firms made available by the economic
downturn, the sources said.
Lotte Chilsung Beverage Co., a unit of Lotte Group, took advantage of the group's
ample liquidity in it's takeover on Tuesday of Doosan Corp.'s liquor unit for 503
billion won.
The takeover is forecast to help Lotte Group compete against Hite Holdings Co.,
which owns Hite Brewery Co., the country's largest beer maker, and Jinro Ltd.,
the biggest maker of the distilled beverage soju.
In December, the group bought a 21 percent stake in Cosmo Investment Management
Co. for 62.9 billion won from Japan's Sparx Group, Asia's biggest hedge-fund
manager. Under the contract, Lotte secured the rights to increase its stake in
Cosmo Investment to 51 percent by 2011.
The purchase was part of Lotte's efforts to further diversify its business
portfolio into finance after its acquisition of a local non-life insurer last
January, which was renamed Lotte Non-Life Insurance Co.
In addition, Lotte purchased Chocolaterie Guylian NV, a Belgian chocolate
manufacturer, for 105 million euros and a 75 percent stake in discount retailer
PT Makro Indonesia for 294 billion won last year.
PT Makro, held by Dutch wholesaler SHV Holding, operates 19 stores in Indonesia,
one of Southeast Asia's largest economies. In 2007, Lotte acquired eight Chinese
stores from SHV.
Lotte has also shown an interest in purchasing Oriental Brewery Co., South
Korea's second-largest brewer, as well as a local brokerage house.
Lotte is hoping to start work this year on the construction of a 555-meter-tall
skyscraper in Seoul which the group has been planning for 14 years. Lotte
recently asked the Seoul Metropolitan Government to resume discussion on approval
of its plan to build the tower.
The Seoul government initially approved construction of the building in April
2007 but withdrew its approval several months later in accordance with a petition
from the Defense Ministry.
The site for the envisioned skyscraper is located just 5.7 kilometers away from
Seongnam Airport, a strategic Air Force base used by presidents and foreign
dignitaries.
Because of its proximity to the airport, the government proposed that the height
of the planned building be reduced to meet the maximum height allowed of about
200 meters.
ksnam@yna.co.kr
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