Lotte Confectionery Co., a unit of South Korean retail giant Lotte Group, said Wednesday that Lotte’s Japan operation will increase its stake in the affiliate, a move seen as part of efforts to cement the incumbent group chairman’s grip in the conglomerate amid a succession feud.
In a regulatory filing, Lotte Confectionery said that Tokyo-based Lotte Holdings will buy 7.9 percent of its shares at 2.3 million won ($1,950) per share during trading hours by Dec. 28, a deal worth about 258 billion won.
Last week, Lotte Holdings bought a 2.1-percent stake in Lotte Confectionery through block deals in after-hour trading.
If the transaction is completed, Lotte Holdings’ stake in the confectionery unit will rise to 10.3 percent to become the No. 2 stakeholder after Lotte Aluminum.
“Lotte Holdings will increase its stake in Lotte Confectionery to step up cooperation in the confectionery business for a synergy effect,” Lotte said in a release.
The move comes as Lotte Group chairman Shin Dong-bin and his elder brother Dong-joo have been involved in a succession feud over the group whose business portfolio ranges from food to retail, mostly based in South Korea and Japan.
The latest share purchase is interpreted as an effort to strengthen Dongbin’s grip on Lotte Confectionery, which stands at a critical position in the group’s cobweb-like structure.
The confectionery unit has stakes in other key Lotte affiliates, including Lotte Shopping, Lotte Chilsung and Lotte Food, serving as a critical link in South Korea’s fifth-largest conglomerate.
Shin Dong-bin also owns an 8.8-percent stake in Lotte Confectionery, followed by Shin Kyuk-ho’s 6.8 percent and Shin Dong-joo with 4 percent.
Founder Shin Kyuk-ho has sided with Dong-joo, who has waged several suits against his brother in Japan and Korea after being fired from his senior executive position at Lotte Holdings earlier this year. (Yonhap)
