Total Stake of 34.69% with an Additional 19.7% Acquisition
Lotte Rental, a subsidiary of Lotte Group, has obtained approval from competition authorities for the additional acquisition of shares in Socar, the number one car-sharing company in South Korea.
The Fair Trade Commission announced on the 31st that it approved the business combination in which Lotte Rental acquires an additional 19.70% stake in Socar.
With this approval, Lotte Rental's stake in Socar increased to 34.69%, making it the second largest shareholder. The largest shareholder is former Socar CEO Lee Jae-woong, the founder of Daum, holding 37.97%.
Lotte Rental became a major shareholder by acquiring an 11.79% stake in Socar in March 2022, and in August last year, it acquired an additional 3.21%, holding a total of 14.99%. Subsequently, in September last year, it reported to the Fair Trade Commission its intention to acquire a 17.91% stake in Socar from SK. On the 23rd, it also reported an additional purchase of 1.79% stake.
Inside and outside the industry, concerns have been raised that with this share acquisition, Lotte Rental could leverage Socar to expand its dominance in the car rental market, including short-term rentals and car-sharing, potentially restricting competition.
The Fair Trade Commission reviewed whether this business combination would allow Lotte Rental to exert substantial influence over Socar's overall management. The Commission concluded, "Given the current shareholding structure, it is difficult to see that Lotte Rental can exercise substantial influence over Socar's overall management."
The Commission cited reasons such as the fact that since Lotte Rental reported the business combination, Socar's largest shareholder has continuously increased their stake through on-market purchases, and that control over Socar has been secured through joint management agreements and shareholder alliances.
The Fair Trade Commission explained, "If after securing this stake, Lotte Rental acquires additional shares to become the largest shareholder, appoints additional executives at Socar, or participates in Socar's management, resulting in changes to the control relationship, we will re-examine whether there is any restriction of competition."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
