Lotte Group is in the final stages of selling its 61.18% stake in Lotte Rental Co. (089860.KS)—Korea's largest car-rental operator—to U.S. private equity firm Texas Pacific Group (TPG) for approximately KRW 1.3 trillion (USD 941 million), according to investment-banking sources familiar with the matter.
The implied per-share price of roughly KRW 58,000 represents a 25% discount against the KRW 77,115 per share agreed with Affinity Equity Partners in a deal that later collapsed. Hotel Lotte and Busan Lotte Hotel, which collectively own about 61.18% (22,212,063 shares) of Lotte Rental, would exit their positions entirely under the new transaction.
The deal has yet to be formalised; both sides are still finalising terms and a share purchase agreement (SPA) has not been signed as of July 1, 2026.
Why Lotte Is Taking the Haircut
The broader Lotte group has been under financial pressure to shore up liquidity. Abandoning the plan to retain a residual ~5% stake—as envisaged in the earlier Affinity structure—signals that Lotte now prioritises a clean exit and immediate cash over future upside from a partial holding.
The previous Affinity deal had been struck at KRW 77,115 per share for a 56.17% stake (20,395,694 shares) worth KRW 1.5729 trillion. That transaction unravelled after signing, leaving Lotte facing pricing pressure and limited buyer interest from other large PE firms including KKR, Carlyle, Bain Capital and EQT, all of which ultimately stepped back.
In that context, IB sources describe the TPG transaction as "a solid outcome"—accepting a lower price in exchange for a clean, full-stake exit and roughly KRW 1 trillion in fresh cash.
TPG's Strategic Play: A KRW 8 Trillion Mobility Platform?
TPG's interest goes beyond a straightforward buyout. The firm is already the second-largest shareholder of Kakao Mobility, the ride-hailing and transportation-services arm of Kakao Corp. (035720.KS), and is currently exploring exit options on that investment.
Industry observers note that TPG may be positioning to merge Lotte Rental's fleet-management, car-rental and used-car businesses with Kakao Mobility's platform—creating an integrated mobility group spanning ride-hailing, vehicle leasing, fleet services and app-based dispatch under one roof. If that consolidation scenario materialises, analysts estimate the combined entity could be valued at around KRW 8 trillion (USD 5.8 billion) ahead of a potential trade sale or IPO, making this one of Korea's largest mobility M&A bets in recent years.
Key Risk
The deal remains in negotiation; terms—including final price and structure—could shift before an SPA is inked. The collapse of the prior Affinity transaction after a signed SPA illustrates that late-stage M&A in Korea's car-rental sector can still unravel.
Sources: ChosunBiz · ChosunBiz MoneyMove
