Skip to content
  • KOSPI 3133.64 +8.40 +0.27%
  • KOSDAQ 1034.82 -2.21 -0.21%
  • KOSPI200 410.97 +1.13 +0.28%
  • USD/KRW 1175.3 -6.40 -0.54%
  • JPY100/KRW 1,060.79 -10.66 -1.00%
  • EUR/KRW 1,377.45 -10.10 -0.73%
  • CNH/KRW 181.89 -0.30 -0.16%
View Market Snapshot

[Exclusive] M&As

Lotte teams up with IMM PE to acquire furniture maker Hanssem

The conglomerate is also aggressively seeking M&A targets in the bio and healthcare sectors

By Sep 01, 2021 (Gmt+09:00)

Lotte is aggressively pursuing M&As
Lotte is aggressively pursuing M&As

Lotte Group is seeking to acquire a stake in Hanssem Co., South Korea’s largest furniture and home furnishing company, with an investment of up to 300 billion won ($259 million).

According to investment banking sources on Tuesday, Lotte has signed a non-disclosure agreement with IMM Private Equity for its investment in Hanssem and is discussing with the Seoul-based private equity fund over details, including the size of its stake purchase.

Hanssem already signed a preliminary agreement last month to sell a 30.21% stake and its management right to IMM PE. The private equity firm has been looking for financial investors to help finance the deal, estimated at about 1.5 trillion won.

IMM PE will set up a special-purpose company (SPC) for the financing and Lotte is expected to take over between 30% and 40% of the SPC, the sources said. Lotte’s investment is estimated at around 200 billion-300 billion won, they said.

Lotte is expected to make the final decision on its investment as early as this week after Chairman Shin Dong-bin returns from his trip to Japan.

“The investment will create synergy with Lotte’s affiliates such as Lotte Shopping, Hi-Mart and construction units,” said an investment banking industry official. “We understand Lotte is not interested in managing Hanssem.”

Hanssem is Korea's top furniture and home furnishing brand
Hanssem is Korea's top furniture and home furnishing brand

POSSIBLE M&As IN BIO, HEALTHCARE SECTORS

Lotte has been actively seeking mergers and acquisitions as the conglomerate is striving to diversify its business portfolio.

In early August, the group newly established healthcare and bio teams under its management innovation department, directly controlled by its chairman, to seek M&As in the two promising sectors.

A group official recently said Lotte is “deeply” interested in the biopharmaceutical contract manufacturing organization (CMO) business.

“We have already chosen multiple candidates for an acquisition and we’re reviewing it,” he said. “Separately, Lotte plans to establish a 50 billion to 60 billion won fund to invest in a promising bio startup.”

Lotte is also said to be pushing for a joint venture with a global pharmaceutical company.

Lotte Group Chairman Shin Dong-bin
Lotte Group Chairman Shin Dong-bin

INTEREST IN SM ENTERTAINMENT

Industry officials said Lotte Group may join a bid to buy a stake in SM Entertainment Co., the label behind K-pop stars such as Red Velvet, Girls' Generation, Shinee, EXO, NCT and BoA.

SM’s chief producer Lee Soo-man has put his entire 18.72% stake in the K-pop agency up for sale and CJ ENM Co. and Kakao Entertainment Co. have expressed interest.

“SM wants to get as much as 600 billion won, double the market expectations, for the stake and Lotte is looking at a possible investment for a certain stake,” said an industry official.

Lotte’s interest in Hanssem, the furniture maker, comes as its competitors in the logistics sector also run the furniture business.

Hanssem logo
Hanssem logo

Retail giant Shinsegae and Hyundai Department Store Co. own household furniture makers Casamia Co. and Hyundai Livart Furniture, respectively.

Hanssem pioneered Korea’s kitchen furniture industry in 1970, and then entered the interior and remodeling businesses, characterized by the country’s first large showrooms that provide hands-on experience of house decorations for a kitchen, bedrooms and a living room at one place.

Write to Dong-Hui Park and Jae-young Han at donghuip@hankyung.com

In-Soo Nam edited this article.

Comment 0

0/300