Lotte Shopping picked as prime Hi-mart bidder

Lotte Shopping Co., the flagship affiliate of retail-oriented conglomerate Lotte Group, said Wednesday that it has been picked as the preferred bidder for the purchase of electronics appliance retailer Hi-mart Co.

“Lotte was tapped because private equity firm MBK Partners Ltd. opted not to bid for Hi-mart,” a company representative said. He added results related to the purchase negotiations will be announced in the near future, indicating that the deal is close to being sealed.

Independent market insiders claimed that Lotte Shopping already reached a tentative understanding to buy Himart shares for 80,000 won ($70) each.

They said with Lotte successfully launching “digital parks” within their larger stores that mostly sell information technology products, taking over Himart could a create positive synergy effect.

Lotte Shopping currently has 527 stores across the country including 96 large discount outlets, while Hi-mart has 314 stores.

Lotte said that since the first digital park was launched in November 2009, a total of 12 have been set up, with sales of electronics jumping 65 percent compared to the past. The company said that because its digital park is focused on IT products, there is no serious collision in the type of products handled by Hi-mart, which specializes in everyday household appliances.

An executive for Lotte, meanwhile, said that it is too early to say if a formal agreement will be reached. He however, made clear that both sides wanted a successful conclusion to the talks.

If Lotte buys Himart, it could play an even greater role in the domestic retail market and allow it to compete favorably with rivals such as the Shinsegae Group that controls E-mart, the country’s largest discount store chain, and Shinsegae Department Stores. (Yonhap News)