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Biz News Korea(Eng)

Lotte Duty Free mulls takeover of foreign luxury brand

Collected: 2016.04.08

Distributed: 2016.04.11

Source: Go Direct

[Lotte Group Chairman Shin Dong-bin]

Lotte Duty Free, South Korea’s largest travel retail company, will seek an acquisition of a foreign luxury goods maker in a bid to boost revenue through business verticals.

Lotte Duty Free will soon build an M&A plan and draw up a shortlist of targets, said an unnamed official of Lotte Group with the knowledge of the matter.

The company will be able to scale up its bargaining power by having a premium luxury brand under its wing because it can help attract Chinese tourists, the official said.

DFS Group, the global No. 2 duty-free shop operator, is owned by LVMH Moet Hennessy Louis Vuitton SA, the French luxury goods conglomerate. Lotte Duty Free wants to create synergy from having a business structure like DFS Group.

Lotte Duty Free is also considering a takeover of an overseas duty-free shop operator. It is reportedly contacting foreign tax-exempt store operators including an Australian duty-free business about possible mergers and acquisitions.

The official said part of the proceeds from the upcoming IPO of Hotel Lotte Co. this year will be able to support the M&A plan.

Lotte Duty Free aims to become the world’s largest duty-free shop operator by expanding its business. Earlier this year, Lotte Group Chairman Shin Dong-bin announced a vision to develop its duty-free shop business to be the world’s largest one by 2020.

As of 2014, Lotte was the world’s No. 3 duty-free operator by revenue after Dufry of Switzerland (4.85 billion euros) and DFS Group of the United States (3.75 billion euros).

By Sohn Il-seon

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