Lotte Chilsung Beverage, a listed subsidiary of Lotte Group, said in its disclosure statement that it is currently negotiating a deal to take over a PepsiCo bottler in Pakistan.
It added that the company would further disclose details when the deal progresses in three months.
This comes as the Korea Exchange sought clarifications from the soft drink maker to verify reports that it is seeking an acquisition of Lahore PepsiCo in Pakistan last month.
Lotte Chilsung, whose majority shareholder is Lotte Group founder Shin Kyuk-ho, has recently been expanding its business in developing markets of Southeast Asia. It has acquired a 38.88 percent stake in Pepsi-Cola Products in the Philippines and established a joint venture in Myanmar.
Lotte Chilsung’s second-biggest shareholder Lotte Confectionary acquired Kolson, a Pakistan-based food and snacks company, in 2009. Lotte Confectionary has an 8.4 percent stake in Lotte Chilsung, while founder Shin and his family hold more than a 20 percent stake in the beverage-maker.
Lotte Chilsung, which has been a Pepsi bottler in Korea over the past 30 years, has a market share of some 40 percent in local carbonated soft drinks, according to the company’s audit filing.
It noted that it holds an “unsatisfactory level” of shares in China, where demand for teas, water and juice products are steadily growing, while that of soda pop is increasing by a small margin. In Myanmar, its market share in carbonated soft drinks is estimated at around 16 percent.
“The company plans to further increase its market shares through sales with its core soft drink products,” it said in its financial report.
Lotte Chilsung has current assets of 852.7 billion won ($731.2 million) including cash and cash-equivalents of 169.8 billion won, with about 747.8 trillion won in current liabilities.
By Park Hyong-ki (hkp@heraldcorp.com)