Key Takeaways
- • TPG launches exclusive due diligence on acquiring 61.18% of Lotte Rental held by Hotel Lotte and Busan Lotte Hotel, positioning the global PE giant as lead bidder in a high-stakes Korean transaction after rival Affinity Equity Partners' failed bid.
- • Deal projected to generate ~1 trillion won in cash flows to Lotte Group upon completion; however, TPG's acquisition price is expected to be lower than Affinity's prior proposal because the transaction will involve only secondary share sales without issuing discounted new shares—eliminating regulatory monopoly concerns that derailed the previous attempt.
- • Lotte Rental demonstrates strong operational fundamentals with Q1 2026 sales of 730.9 billion won (up 6.6% YoY) and operating profit of 83.6 billion won (up 24.8% YoY), supported by diversified revenue beyond used car sales into short- and long-term rental segments; 2025 operating profit reached 312.5 billion won.
- • TPG circles back to Korean rental car market after losing KT Rental (Lotte Rental's predecessor) acquisition bid in 2015, now competing in an industry where Lotte Rental holds the No. 1 market position and generates reliable cash flows.
- • Tier-one PE operator with $306 billion AUM (TPG manages one of the world's four largest private equity platforms alongside Blackstone, KKR, and Carlyle) now positioned to add Korean logistics-adjacent asset to portfolio.
Summary
Texas Pacific Group (TPG), one of the world's four largest private equity operators, has entered exclusive negotiations to acquire a majority stake in Lotte Rental, South Korea's leading car rental company. According to investment banking sources, TPG has commenced independent due diligence on acquiring 61.18% of Lotte Rental held by Hotel Lotte and Busan Lotte Hotel. The transaction, if completed, is expected to channel approximately 1 trillion won into Lotte Group's coffers.
This acquisition represents TPG's second major attempt at the Korean rental car market. The firm previously participated in bidding for KT Rental—the predecessor entity to Lotte Rental—in 2015 but was outbid by Lotte. The current opportunity emerges after rival bidder Affinity Equity Partners abandoned its acquisition attempt following regulatory scrutiny over monopoly concentration in the rental car industry. Affinity had sought to acquire 56.2% of Lotte's management stake for 1.5729 trillion won and planned to purchase additional new shares at below-market pricing through third-party capital allocation.
TPG's transaction structure differs materially from Affinity's failed approach: the deal will proceed exclusively through secondary share sales without issuing discounted new shares. This structural change addresses the regulatory monopoly concerns that proved fatal to the previous bid and is expected to result in a lower acquisition price for TPG than the terms Affinity had proposed.
Lotte Rental represents a high-quality cash-generative asset for PE investors. The company maintains industry-leading market position and demonstrates robust operational momentum. In the first quarter of 2026, Lotte Rental reported sales of 730.9 billion won (up 6.6% year-over-year) and operating profit of 83.6 billion won (up 24.8% year-over-year), with full-year 2025 operating profit reaching 312.5 billion won. Growth is now driven by diversified revenue streams beyond traditional used car sales, with expanding contributions from short- and long-term rental operations.
TPG manages $306 billion in assets under management across private equity, venture capital, public equity, and debt strategies, positioning it among the elite cohort of global alternative asset managers alongside Blackstone, KKR, and Carlyle. A successful Lotte Rental acquisition would establish TPG's presence in Korean logistics-adjacent infrastructure while capturing a mature, profitable business with established market dominance.
This acquisition represents TPG's second major attempt at the Korean rental car market. The firm previously participated in bidding for KT Rental—the predecessor entity to Lotte Rental—in 2015 but was outbid by Lotte. The current opportunity emerges after rival bidder Affinity Equity Partners abandoned its acquisition attempt following regulatory scrutiny over monopoly concentration in the rental car industry. Affinity had sought to acquire 56.2% of Lotte's management stake for 1.5729 trillion won and planned to purchase additional new shares at below-market pricing through third-party capital allocation.
TPG's transaction structure differs materially from Affinity's failed approach: the deal will proceed exclusively through secondary share sales without issuing discounted new shares. This structural change addresses the regulatory monopoly concerns that proved fatal to the previous bid and is expected to result in a lower acquisition price for TPG than the terms Affinity had proposed.
Lotte Rental represents a high-quality cash-generative asset for PE investors. The company maintains industry-leading market position and demonstrates robust operational momentum. In the first quarter of 2026, Lotte Rental reported sales of 730.9 billion won (up 6.6% year-over-year) and operating profit of 83.6 billion won (up 24.8% year-over-year), with full-year 2025 operating profit reaching 312.5 billion won. Growth is now driven by diversified revenue streams beyond traditional used car sales, with expanding contributions from short- and long-term rental operations.
TPG manages $306 billion in assets under management across private equity, venture capital, public equity, and debt strategies, positioning it among the elite cohort of global alternative asset managers alongside Blackstone, KKR, and Carlyle. A successful Lotte Rental acquisition would establish TPG's presence in Korean logistics-adjacent infrastructure while capturing a mature, profitable business with established market dominance.
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