The rivalry between Lotte, the country’s largest retailer, and Shinsegae, the No. 2, is nothing new, but it has never been as apparent and fierce as now.

The corporate archenemies have locked horns several times lately, with the heirs apparent of both business empires seeking to expand their territories before they finally take full control.

In the latest such incident, Shinsegae, the country’s 13th-largest business enterprise by assets, on Feb. 27 decided not to bid for control of Kumho Industrial, the operator of Korea’s second-largest carrier, Asiana Airlines. Just two days earlier, it had expressed an interest in participating.
 

“As we have confirmed that our rival is not interested in buying Kumho Industrial, Shinsegae will not take part in the bidding,” the group stated.

“The rival is, of course, Lotte. Everyone was talking about whether Lotte would bid or not,” an analyst said. “But directly mentioning Lotte and retracting a potential bid was just bizarre.”

The main reason behind its initial interest in bidding was Shinsegae’s desire to secure its prestigious department store in Gwangju, which is annexed to the Gwangju Express Bus Terminal owned by Kumho. With the Gwangju outlet thriving thanks to the traffic at the terminal, the group thought Lotte may try to gain full control of Kumho Industrial ― and the department store.

That aside, their rivalry is becoming more personal.

Shinsegae vice chairman Chung Yong-jin, who made the decision to participate initially and then withdraw, is often compared to Lotte chairman Shin Dong-bin.

While Shin was rumored to be interested in adding Asiana to his company portfolio ― which already ranges from petrochemical to construction, to retail and entertainment as well as food and tourism ― Chung was under constant pressure to expand his realm and decided to join the bidding to keep his rival in in check, observers suggest.

As of now, Shin, who is solidifying his status as the crown prince of Lotte that spans across Asia, Europe and the U.S., seems to have taken a step back. In recent times, he has aggressively pursued mergers and acquisitions, having spent more than 8 trillion won a month on buying new companies.

According to industry sources, Shin is still keen to successfully bid for Kumho Industrial and acquire Asiana by joining hands with a private equity fund, leaving Chung with something to envy.

However, Lotte officials denied the allegations, saying, “Shin is currently in no position to aim for Asiana.”

By Bae Ji-sook (baejisook@heraldcorp.com)