Lotte Group (Seoul, South Korea) is purchasing GS Retail's department and discount store operations for an estimated $1.15 billion. The deal is the largest acquisition by South Korea's leading department store operator. In October, the company purchased Chinese supermarket chain Times Ltd for $630 million, and last month, it completed a $235 million deal to buy convenience store chain Buy The Way.
Through the agreement, Lotte will take over three GS Square department stores and 14 GS Mart discount stores, bringing its discount store total to more than 70 in Korea, trailing Shinsegae's E-Mart and U.K. retailer Tesco's Home Plus.
“Lotte is already the No.1 in department store business, and adding three more stores, and properties with it, will further strengthen its market position,” says Park Gene, a Woori Investment & Securities analyst.
GS Retail, an arm of GS Group, plans to focus on its convenience store and supermarket chains, opening 800 GS25 stores in 2010. “We plan to make aggressive investment in our convenience and supermarket business to reclaim the top position in the sector,” GS Retail said in a statement.