"Lotte Group is expected to acquire a major share in a bottling company of Pepsi-Cola beverages in Pakistan," said the Korean-language newspaper. The report reflected positively on LCPL shares at Pakistan Stock Exchange as the stock ended the session as one of the 10 most-traded scrips with 6.61 million trading turnover.
Having climbed to Rs 5.95 in intraday trade, the issue settled higher at Rs 5.65 at close from the previous Rs 5.25. Stock market observers also had an eye on the "mover", a nomenclature used by equity reporter for any development impacting share prices of a listed stock. "Lotte Group plans to buy 51-52 percent of Lahore PepsiCo for ~100b won," Mohammad Sohail, CEO Topline Research, told his WhatsApp contacts.
Being advised by accounting and law firms, Deloitte Anjin LLC and Lee & Ko, Lotte is, reportedly, negotiating with the Lahore-based bottling PepsiCo the last-minute sales terms, including takeover price. Lotte Chilsung Beverage Company, a subsidiary of Lotte Group, is the actual acquirer.
The possible deal, Korean newspaper said, was part of Lotte's efforts to expand its business in Pakistan where population was growing at a much faster pace along with rising incomes and "westernising taste". "The population of Pakistan, which currently stands at 190 million, is expected to exceed 300 million in 2030," the report said. About 37 percent of Pakistanis are 14 years old or younger. This, the report said, suggested "steady growth in sweetened beverages".
"Lotte Group has plans to acquire additional Pepsi-Cola bottlers in various regions in Pakistan," it reported. Officials locally affiliated with the multinational group, confirming the news item, said it was not concrete yet. "We are considering but have not finalised it," said a local Lotte official, seeking anonymity.
Asked if the Korean conglomerate was expanding its business in Pakistan, the official referred to his group's past acquisitions like LCPL and Lotte Kolson. The former is a petrochemical firm listed at PSX and the latter is a confectioner acquired respectively in 2009 and 2010. "This report reflects that we are going for the expansion here," the official told Business Recorder adding, however, that nothing to this effect his side had received from its parent firm so far.
According to Maeil Business report, after the transaction completion Lotte would work in Lahore in partnership with the owners of PepsiCo balance shareholdings. "The remaining shares will continue to be owned by the existing shareholder whom we plan to establish a partnership with," a senior Lotte official reportedly said.