Lotte seeks to buy POSCO’s retail units

Lotte Group, the country’s fifth largest family-controlled conglomerate specializing in retail and leisure industries, is in talks with POSCO to take over the world’s fourth largest steelmaker’s three retail units here and abroad, according to industry sources Tuesday.

They include Diamond Plaza, a hybrid residential and commercial building in Vietnam, and Central Square, a high-rise shopping mall in Busan, both owned by POSCO Engineering & Construction. Daewoo Department Store in Changwon, South Gyeongsang Province, owned by POSCO’s trading arm Daewoo International is also up for sale.

Sources said Lotte has reached an agreement with POSCO to take over all three properties in a package deal, adding it plans to complete the sale this month.

“We are considering purchasing retail facilities held by POSCO’s affiliates. At the moment, we cannot say anything for sure because we are in an early stage of negotiations,’’ a Lotte Group spokesman said. “Just like E-Land and other firms showing interests in POSCO’s properties, price is the most important criterion for us.’’

POSCO also confirmed the sales talk with Lotte, saying it has been seeking to sell the three properties over the past month.

“Nothing has been decided at the moment. When the final deal is reached, we will make public all the details concerning it,’’ a POSCO spokesman said.

In October, POSCO announced a plan to dispose of non-essential affiliates as part of its preemptive measures to better cope with worsening business conditions. The steelmaker, who has seen its bottom line deteriorate, has been scrambling to secure cash amid the ongoing global steel industry slump and high prices of iron ore and other raw materials.

The firm has contacted E-Land, Hanwha, Lotte and other groups to dispose of three retail facilities owned by its subsidiaries. But the sales talks did not go smoothly, reportedly due to differences over price.

Lotte has been most active in seeking to acquire POSCO’s retail units, particularly Diamond Plaza, as it looks to boost its presence in Vietnam and other Southeast Asian nations.

In a meeting with CEOs of Lotte Group affiliates earlier this month, Chairman Shin Dong-bin said it should take over good value companies to strengthen its core competiveness. Shin also said the group should advance into foreign markets ahead of its rivals to secure an upper hand and post sustainable growth. <The Korea Times/Lee Hyo-sik>