이 기사는 2022년 01월 10일 08시07분 thebell에 표출된 기사입니다

Lotte Group is said to have expressed interest in acquiring Ministop Korea, the country’s fifth largest convenience store retailer, with the South Korean conglomerate likely to consider doing so through its convenience store chain Korea Seven.

Japan’s Aeon Group, which owns Ministop Korea, plans to sell a 100% stake in the South Korean unit of its convenience store business. The stake is estimated to be worth about 200 billion won ($166 million).

Lotte Group declined to comment on whether it is bidding for Ministop Korea. The retail conglomerate was one of the suitors for the convenience store chain when Aeon Group made the first attempt to sell the asset four years ago, although the sale was ultimately called off in 2018.

Other bidders in the race include Emart24, the convenience store chain of Shinsegae Group, and private equity firm Anchor Private Equity.

A potential acquisition of Ministop Korea by Lotte Group could help expand the market share of its convenience store chain, Korea Seven, and also generate synergies with Lotte Shopping amid the conglomerate’s push for omnichannel retail.

The cash balance of the group as a whole is sufficient to fund the acquisition. However, industry watchers are skeptical about Korea Seven’s ability to acquire the convenience store chain on its own.

Korea Seven had cash and cash equivalents of 322 billion won at the end of September last year. But its debt levels have risen in recent years due to the Covid-19 pandemic, with the company’s total debt standing at 1.6 trillion won at the end of September last year and the financial expense of 18 billion won in the first three quarters of 2021.

Moreover, additional investment may need to be made after the acquisition. “Extra costs would be needed to complete post-merger integration,” an industry insider said. “But with an increase in the number of stores, there would also be a saving in other operational costs such as logistics.”

Ministop Korea was also hit by the pandemic. It recorded an operating loss of 14.3 billion won and a net loss of 13.8 billion won in the fiscal year ended on February 28, 2021 on revenue of 1.1 trillion won, down 4.2% year-over-year. (Reporting by Hyo-beom Lee)