Lotte Group hopes to acquire Hi Mart, the nation’s largest electronics appliance retailer, in an apparent bid to gain a new growth engine.
Lotte revealed its intention to buy Hi Mart on Monday when the Korea Exchange asked the retail giant to confirm the rapidly spreading market speculation.
“We are not considering specifics as Hi Mart has yet to announce the details on its sale of shares. But we plan to decide on the participation in an opening bid,” the company said on Monday.
The comment came when Lotte Group chairman Shin Dong-bin hinted at the potential acquisition of Hi Mart in a recent interview even though he said he had “yet to receive the final report.”
He had also ordered executives to find a new growth engine for the company to overcome the current economic slowdown.
“Along with increasing efficiency of existing businesses and improving profits, we should take a strategy of expanding business into related areas,” he was quoted as saying by company officials.
Eugene Corp., the largest shareholder of Hi Mart, plans to receive bidding offers from potential buyers within the month and select preferred bidders in March.
Along with Lotte, other retail companies such as GS, Shinsegae and CJ are speculated to have interest in acquiring the company. Some industry watchers predict that larger conglomerates or foreign retailers could submit offers as well.
Hi Mart, established in 1999, is a former domestic sales unit of Daewoo Electronics, which went under court receivership during the 1997-98 financial crisis.
Over the past decade, the company’s sales have surged from 680 billion won ($593 million) in 1999 to 3.5 trillion won last year.
Eugene acquired Hi Mart from Korea CE Holdings with an investment worth 1.95 trillion won in December 2007.
