Korea Blocks Merger of No.1 and No.2 Car Rental Firms over Competition Concerns
Creatrip Team
2 months ago
South Korea’s Fair Trade Commission (FTC) has prohibited a private equity firm, Affinity, from acquiring 63.5% of Lotte Rental because Affinity already owns SK Rent-a-Car, the country’s No.2 rental company. The FTC found that combining Lotte Rental and SK Rent-a-Car would concentrate market power in both short-term (under 1 year) and long-term (1 year or more) car rental markets—especially on the mainland and Jeju Island—raising the risk of price increases and the exit of small competitors. Lotte and SK together hold large shares and advantages (brand recognition, nationwide networks, IT systems, vehicle maintenance and used-car sales), while rivals are mostly small firms or constrained financial companies. The FTC also cited Jeju’s rental quota system (a total-vehicle limit set by the Jeju Special Act) that makes new entry difficult. Because private equity typically aims to sell assets later, behavioral remedies were deemed insufficient, so the FTC imposed a structural ban on the deal to protect competition and consumers.
