Lotte Shopping Co., the flagship affiliate of retail-oriented conglomerate Lotte Group, said Friday it reached a deal to buy electronics appliance retailer Himart Co. for 1.24 trillion won (US$1.09 billion).
The stock purchase agreement calls for the takeover of a 65.25 percent stake in the electronics retailer currently owned by Eugene Corp., Hi Consortium and former Himart CEO Sun Jong-koo, Lotte said in a regulatory filing.
The company added it is paying an average of 81,026 won for the 15.4 million Himart stocks.
The deal was reached just two days after Lotte was tapped as the preferred bidder after private equity firm MBK Partners Ltd. opted not to bid for Himart.
"The deal was reached quickly because both sides wanted to conclude the transaction as soon as possible," a company spokesperson said. He added, however, that Lotte Shopping and the whole conglomerate need to determine how to incorporate Himart into their business operations.
Market insiders said by buying Himart, and with reported sales hitting 3.4 trillion won last year, Lotte will be in a good position to expand its market presence in consumer electronics areas. Himart ranks No. 1 in terms home appliance and information technology product sales, outperforming similar retail operations run by Samsung Electronics Co. and LG Electronics Inc.
Himart has 2,600 employees and runs 310 stores across the country, while Lotte Shopping has 527 outlets, including 96 large discount stores.
Lotte has successfully launched its own "digital parks" within their larger stores in 2009, with 12 such outlets currently in operation.
"By combining the retail knowhow of the two companies, Lotte should be able to pull off positive synergy," industry experts said. They added that by buying Himart, Lotte's home shopping network and online store could also receive a boost in both local and overseas markets. Sources added that Himart's high after-sale services satisfaction ratings will benefit Lotte.
Lotte's sales reached 6.9 trillion won last year and if this is combined with Himart's numbers, the total exceeds 10.3 trillion won, making it one of the top three retailers in South Korea.
South Korea's discount retail market is ruled by E-mart, owned by its rival, Shinsegae Group. E-mart reported sales hitting 13.8 trillion won last year. Homeplus, a South Korean-British discount retail chain, said its sales reached 11.5 trillion won, making it the second largest in the country. (Yonhap News)
