[Asia Economy Reporter Lee Seon-ae] Lotte Chilsung Beverage has reacquired 'Philippine Pepsi' (PCPPI) and 'Lotte Liquor Japan Corporation.'
On the 10th, Lotte Chilsung Beverage held a board meeting and announced that it decided to acquire two overseas subsidiaries from Lotte Holdings for a total of 91.9 billion KRW.
Lotte Chilsung Beverage had spun off into business and investment divisions during the launch of Lotte Holdings in October 2017 and transferred the investment division to Lotte Holdings. After three years, it is reacquiring some subsidiaries.
The acquisition will be conducted through a paid-in capital increase by contribution in kind. Through this contribution in kind, Lotte Chilsung Beverage plans to acquire a 42.2% stake in PCPPI for 71.4 billion KRW and a 100% stake in Lotte Liquor Japan Corporation for 20.5 billion KRW.
This is expected to improve financial stability and increase synergy in overseas businesses. Lotte Holdings' stake in Lotte Chilsung Beverage will increase from the existing 26.5% to 34.6%, thereby strengthening its control over Lotte Chilsung Beverage, a core food affiliate, as a holding company.
In June, Lotte Chilsung Beverage acquired a 30.7% stake in PCPPI through a public tender offer on the Philippine Stock Exchange. Once the acquisition of the 42.2% stake from Lotte Holdings is completed, it plans to accelerate strengthening its local beverage business in the Philippines by securing a total of 72.9% ownership and expanding control over PCPPI.
A Lotte Chilsung Beverage official said, "This reacquisition of overseas subsidiaries aims to align ownership and operation of the core beverage business to increase management efficiency and enhance corporate value," adding, "As Korea's number one beverage company, we will combine the business capabilities accumulated over 70 years to create synergy with Philippine PCPPI and continuously improve performance."
Lotte Chilsung Beverage expects an improvement in its financial structure as total assets and capital will increase through this paid-in capital increase. In August, Lotte Chilsung Beverage acquired 100% stakes in four companies, including Lotte Beverage USA, Singapore Lotte Beverage Holdings, Nakcheon Liquor Co., Ltd., and MJA Wine, from Lotte Holdings for 10.5 billion KRW in cash.
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