FTC halts Affinity’s plan to combine Korea’s top 2 car rental firms

A Lotte Rental outlet on Jeju Island / Courtesy of Lotte Rental

Korea’s Fair Trade Commission (FTC) has blocked a private equity firm’s plan to effectively combine SK Rent-a-Car and Lotte Rental, the top two players in the domestic rent-a-car market, citing concerns over reduced competition.

The antitrust watchdog said Monday, it rejected Affinity Equity Partners’ proposal to acquire a 63.5 percent stake in Lotte Rental, the biggest rent-a-car company here, because the move would place the industry’s top two players under Affinity’s control and significantly limit competition.

Affinity, which acquired No. 2 player SK Rent-a-Car in August 2024, signed a deal in March last year to purchase the controlling stake in Lotte Rental at around 1.6 trillion won ($1.1 billion) and filed a combination notice with the antitrust watchdog.

The deal initially sparked expectations for a car rental giant, but the FTC decided to ban it after nearly 10 months of review. This is the first case of the FTC blocking an acquisition since March 2024.

The deal had also been viewed as playing a critical role in improving Lotte Group’s financial structure, as the conglomerate has been pursuing business streamlining efforts amid prolonged underperformance at key units such as Lotte Chemical since 2024.

Both Lotte Group and Affinity said they respect the FTC’s decision and will “review various options, including whether to make additional proposals to address the regulator’s concerns over increased market dominance.”

Lotte Group stressed that the “delay” in the Lotte Rental sale “will not be a setback in its ongoing financial restructuring” aimed at mid- to long-term financial stabilization.

“Since 2024, Lotte Chemical has been carrying out corporate-level restructuring, and has already completed the sales of its Pakistan unit and its stakes in Japanese material firm Resonac,” the group said.

“Also, we are carrying out business streamlining efforts centered on major petrochemical complexes in line with government policy directions, and we plan to further improve our financial structure and capital efficiency through additional portfolio adjustments.”