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50470
Sat, 03/14/2009 - 14:44
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https://www.oananews.org//node/50470
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(News Focus) Lotte likely to re-enter bid for Oriental Brewery
By Nam Kwang-sik
SEOUL, March 13 (Yonhap) -- Lotte Group, a South Korean retail and beverage
conglomerate, is expected to try again to acquire beer giant Oriental Brewery Co.
as it is determined to include brewing in its business portfolio, market watchers
said Friday.
Lotte's initial offer for the brewer, South Korea's second-largest beer maker and
the local unit of Anheuser-Busch InBev NV, was reportedly rejected as too low.
Two private equity funds, Affinity Equity Partners Ltd. and KKR & Co., were
picked to take part in a new round of bidding.
The amount of Lotte's initial bid was not revealed. The estimated value of
Oriental Brewery ranges between US$1.5 to $2 billion.
Yoo Jin, an analyst at Goodmorning Shinhan Securities Co., said it is unlikely
Lotte will give up easily on taking over the brewer.
"Lotte may re-enter a bid for Oriental Brewery though its initial bid was
rejected," Yoo said. "Considering its business portfolio, Lotte will try to
acquire the brewer at any cost as it is hard to create synergy without a brewing
business."
The business portfolio of Lotte Chilsung Beverage Co., the liquor and beverage
unit of the group, ranges from soju and whiskey to soda and fruit juice.
Lotte Chilsung launched its soju business this month after it bought Doosan
Corp.'s liquor unit for 503 billion won (US$367 million) in January. Soju is a
popular kind of South Korean distilled liquor made from grain or potatoes.
Liquor-brewing businesses usually maintain an operating profit in the mid-20
percent range, while soft drink businesses generally record an operating profit
of 6 to 7 percent, according to Yoo.
Another analyst who asked not to be named suggested Lotte could try to acquire
Oriental Brewery through various methods.
"There are at least two ways for Lotte to take over Oriental Brewery. One is to
invest in one of the two private equity funds. The other is to buy back the
brewer from whoever acquires it," he said.
Lotte has said it can neither confirm nor deny the report on its initial bid.
"We can not make any comments on the takeover of Oriental Brewery as we signed a
confidentiality agreement with Anheuser-Busch InBev NV, " said an official for
the group on condition of anonymity.
Oriental Brewery has about 40 percent of the local beer market, following Hite
Brewery.
ksnam@yna.co.kr
(END)
SEOUL, March 13 (Yonhap) -- Lotte Group, a South Korean retail and beverage
conglomerate, is expected to try again to acquire beer giant Oriental Brewery Co.
as it is determined to include brewing in its business portfolio, market watchers
said Friday.
Lotte's initial offer for the brewer, South Korea's second-largest beer maker and
the local unit of Anheuser-Busch InBev NV, was reportedly rejected as too low.
Two private equity funds, Affinity Equity Partners Ltd. and KKR & Co., were
picked to take part in a new round of bidding.
The amount of Lotte's initial bid was not revealed. The estimated value of
Oriental Brewery ranges between US$1.5 to $2 billion.
Yoo Jin, an analyst at Goodmorning Shinhan Securities Co., said it is unlikely
Lotte will give up easily on taking over the brewer.
"Lotte may re-enter a bid for Oriental Brewery though its initial bid was
rejected," Yoo said. "Considering its business portfolio, Lotte will try to
acquire the brewer at any cost as it is hard to create synergy without a brewing
business."
The business portfolio of Lotte Chilsung Beverage Co., the liquor and beverage
unit of the group, ranges from soju and whiskey to soda and fruit juice.
Lotte Chilsung launched its soju business this month after it bought Doosan
Corp.'s liquor unit for 503 billion won (US$367 million) in January. Soju is a
popular kind of South Korean distilled liquor made from grain or potatoes.
Liquor-brewing businesses usually maintain an operating profit in the mid-20
percent range, while soft drink businesses generally record an operating profit
of 6 to 7 percent, according to Yoo.
Another analyst who asked not to be named suggested Lotte could try to acquire
Oriental Brewery through various methods.
"There are at least two ways for Lotte to take over Oriental Brewery. One is to
invest in one of the two private equity funds. The other is to buy back the
brewer from whoever acquires it," he said.
Lotte has said it can neither confirm nor deny the report on its initial bid.
"We can not make any comments on the takeover of Oriental Brewery as we signed a
confidentiality agreement with Anheuser-Busch InBev NV, " said an official for
the group on condition of anonymity.
Oriental Brewery has about 40 percent of the local beer market, following Hite
Brewery.
ksnam@yna.co.kr
(END)
