Industry insiders suggest the success of the sale hinges on participation from leading financial players like KB Financial Group and Hana Financial Group. However, both companies have demonstrated a cautious approach to mergers and acquisitions in recent years.
Hana Financial, for instance, pulled out of its planned acquisition of KDB Life Insurance in 2023, and KB Financial’s last major deal was the 2020 purchase of Prudential Life Insurance. Hana Financial Chairman Ham Young-joo recently underscored the group's measured stance, saying, “M&As without a self-sustaining foundation are unnecessary” during his New Year’s address.
A significant challenge in the sale process is bridging the price gap between MBK Partners, Lotte Card’s largest shareholder, and potential buyers. MBK Partners is reportedly seeking around 3 trillion won ($2.07 billion), a valuation that derailed a previous sale attempt in 2022.
Adding to the complexity is Lotte Card’s declining financial performance. The company’s net profit for the first three quarters of 2024 fell 72 percent to 102.5 billion won ($70.65 million), down from 365.7 billion won in the same period the previous year. Analysts cite reduced card processing fees, weak domestic consumption, and rising costs as contributing factors.
Copyright ⓒ Aju Press All rights reserved.