This article appeared on July 5, 2026, at 10:45 p.m. on the capital markets compass "Signal."
Global private equity firm TPG is pursuing an acquisition of the controlling stake in Lotte Rental (089860). Earlier, the Lotte Group decided in late 2024 to sell control of Lotte Rental to Affinity Equity Partners, another global private equity firm, and even signed a share purchase agreement (SPA). However, the deal fell through early this year when the Fair Trade Commission (FTC) blocked the merger. The main reason for the FTC's rejection was that Affinity holds a controlling stake in SK Rent-a-Car, Korea's second-largest car rental company, and taking over the top player, Lotte Rental, would raise concerns about restricted competition.
The Lotte Group, which has aimed to secure cash by selling off subsidiaries, quickly began negotiations with new acquisition candidates after that deal collapsed. Among them, Lotte is narrowing its differences with TPG, which it judged to have a strong will to acquire and a high likelihood of closing the deal.
Meanwhile, the market's attention is focused on how much of a premium TPG will pay for the controlling stake in Lotte Rental, and whether it will also buy up the remaining shares held by minority shareholders in the market. With the capital market paradigm gradually shifting following last year's Commercial Act reform, this article examines the key variables in this big deal.
① "Management Meetings, Due Diligence Under Way; Deal Nears at Mid-50,000 Won Per Share"
TPG is reported to have recently conducted detailed due diligence spanning several hours with Lotte Rental's management, demonstrating a strong will to acquire. An official in the investment banking (IB) industry said, "The acquisition target is likely to be the entire Lotte Rental stake (about 61.18%) held by Hotel Lotte and Busan Lotte Hotel," adding, "There are many observations that the sale price will apply a mid-50,000 won per share level, settling at a total of around the low-to-mid 1 trillion won range." This is about 20% to 30% lower than the acquisition amount Affinity had contracted for in the past.
In addition, the discounted rights offering that Lotte Rental had planned to carry out alongside its decision to sell control to Affinity is unlikely to be pursued in this deal with TPG. At the time, Lotte Rental carried out a third-party rights offering to Affinity, which had the effect of lowering Affinity's per-share acquisition price. This provided a management premium to the major shareholder but drew fierce backlash for diluting minority shareholders' stakes and causing them financial losses. Considering the Commercial Act reform and other factors, such a discounted rights offering attempt is unlikely to emerge again.
Ahead of this deal between Lotte and TPG, there are assessments that both sides' will to see the deal through is firm. Some observers say the SPA could be signed at the end of this month. However, as this is a trillion-won big deal to sell one of Lotte Group's prime listed subsidiaries, everything should be considered unconfirmed until the actual contract is signed. In a regulatory filing on the 1st of this month, Lotte Rental maintained a cautious stance, saying, "We have held discussions including due diligence with TPG, but nothing has been confirmed."
② Commercial Act Reform Shifts Market Rules; EQT, Bain Also Made 100% Tender Offers
Although nothing has been confirmed, the market's interest is already focused on how the remaining stake (about 38.82%) beyond the Lotte Group's controlling stake will be handled. This is because the method of buying only the major shareholder's stake with a management premium added, as in the past, could trigger considerable backlash. Although a mandatory tender offer system has not yet been codified in Korea, assessments hold that the duty of shareholder loyalty introduced through last year's Commercial Act reform is already changing the rules of the capital market.
In fact, global private equity firms that have recently acquired controlling stakes in Korean listed companies have made the decision to buy minority shareholders' stakes at the same price as the management premium paid to major shareholders. EQT's acquisition of Douzone Bizon last year and Bain Capital's acquisition of eCommerce Marketing (eco Marketing) this year are exactly such cases.
Failing to follow this process could give rise to responsibility claims that shareholder value has been damaged, along with the risk of escalating into legal disputes.
An expert in the asset management industry pointed out, "The idea that a company opens up its internal finance, accounting, business plans, strategy, and personnel matters to outsiders in order to sell the major shareholder's controlling stake at a high premium could be seen as contrary to the spirit of the revised Commercial Act."
③ Full Stake Purchase Seen as 2 Trillion Won-Range Deal; Antitrust Approval in Focus
The market expects that if TPG were to buy up all of Lotte Rental's remaining shares, the total acquisition funding would swell to around 2 trillion won. This is far more than the low-to-mid 1 trillion won range needed to acquire only the 61.18% controlling stake held by the Lotte Group.
If TPG were to insist on acquiring only the major shareholder's stake, leading to continued backlash from minority shareholders and causing financial authorities to feel a policy burden, the situation could become somewhat complicated. In fact, Woori Financial Group, which acquired the controlling stake in Tongyang Life Insurance from the previous major shareholder at the low 10,000 won-per-share range, pursued a comprehensive share swap for the remaining stake by applying a market price lower than that. When minority shareholders continued to protest, financial authorities put on the brakes several times, and Woori Financial recently decided to raise the appraisal rights price by 10%.
On the other hand, there are also analyses that acquiring the remaining stake outright would not be difficult given the considerable size of TPG's fund. TPG is a giant private equity firm managing about $306 billion (about 470 trillion won) in assets worldwide. In Korea, after acquiring cosmetics container maker Samhwa for about 300 billion won in 2023, it resold the company to KKR for more than 800 billion won a year and a half later, earning a high return. Executives at the Seoul office are recognized for their considerable work capabilities at the global headquarters as well.
※Please subscribe to Lee Chung-hee's Three Points! We will repay you with thrilling articles like three-point shots.
Meanwhile, among M&A specialist lawyers, there is also an atmosphere of reflecting on why the FTC blocked Affinity's acquisition of Lotte Rental in the past. At the time, the decisive rationale for the FTC's rejection of the merger was concerns over market monopoly arising from Affinity's ownership of SK Rent-a-Car. However, the FTC also cited another reason for its rejection at the time, specifying that "given the nature of private equity funds (PEFs) that aim to sell within a certain period, it is difficult to guarantee the continuity of the enterprise."
