TPG agrees $925m deal to acquire South Korea’s Lotte Rental

TPG has agreed to acquire a controlling 61.17% stake in Lotte Rental, South Korea's largest car rental company, from two Lotte Group affiliates—Hotel Lotte and Busan Lotte Hotel—in a transaction valued at ₩1.31 trillion (approximately $925 million). Under the share purchase agreement, TPG will acquire 22,212,063 shares at ₩59,000 each, with Hotel Lotte contributing 38.14% of the stake and Busan Lotte Hotel the remaining 23.03%. The deal is subject to adjustment for certain contingencies and requires clearance from South Korea's Fair Trade Commission before closing, expected within 14 business days of regulatory approval.

The transaction represents a significant markdown from the previously attempted sale to Affinity Equity Partners, which had agreed to acquire the business at ₩77,000 per share, valuing the deal at approximately ₩1.6 trillion. That transaction collapsed this year after the Korea Fair Trade Commission blocked the combination on competition grounds. Affinity's existing control of SK Rent-a-Car, the country's second-largest rental operator, created antitrust objections to a merger with the market leader. The discount of 23.4% in TPG's bid reflects both the regulatory uncertainty stemming from the failed transaction and the market conditions that emerged following the abandonment of the Affinity deal.

TPG emerged as the preferred buyer from a competitive field that included KKR, Carlyle, EQT, and Bain Capital, according to Korean business press reporting. The firm, which manages approximately $306 billion in assets globally, brings relevant operational experience in South Korea through its recent acquisition and subsequent sale of Samhwa, a cosmetics packaging specialist, to KKR within approximately 18 months. This track record suggests TPG's capability to navigate the South Korean market environment and regulatory landscape.

A critical decision point remains whether TPG will launch a tender offer to acquire the remaining 38.8% minority stake held by other shareholders. Such an offer would substantially increase the total capital commitment to the transaction and would signal deeper strategic intent regarding the business. The deal's completion hinges on obtaining Fair Trade Commission approval, a process that may be less contentious than the Affinity transaction given TPG's lack of competing portfolio assets in the South Korean rental car market. Upon completion, Lotte expects to transition from largest to non-controlling shareholder, representing a significant portfolio pivot for the conglomerate.