Lotte buys into discount chain

SOUTH Korea's largest retailer Lotte Shopping Co plans to acquire a stake in a Chinese discount-store chain to expand its presence on the Chinese mainland, the Seoul-listed company said in a regulatory filing yesterday.

Lotte agreed to buy a 49-percent stake in CTA Makro, which now operates five discount stores in Beijing and two in Tianjin, from SHV Holdings NV for 57.6 million euros (US$82.90 million).

The Netherlands-based SHV Holdings IV now operates CTA Makro with a 49-percent stake while China Trade Association Property Corp Ltd owns 51 percent.

Lotte also plans to open another outlet in Beijing next year, according to the statement. However, the acquisition plan is still awaiting China's regulatory approval.

Shanghai Daily's call to CTA Makro yesterday was not answered.

The retailer, which controls more than 40 percent of South Korea's department store market and 14 percent of discount stores, is preparing to open new outlets through land purchases and buying existing operators in China, it said.

Its rival Shinsegae Co, South Korea's biggest discount-store operator, has opened 10 outlets in China. The booming retailing market on the mainland is attractive to overseas retailers such as Hong Kong-based Lifestyle International Holdings Ltd and Parkson Retail Group Ltd.