Lotte picks up the tab at TGI Friday's
Lotte Group said Thursday that it has taken over the Korean operations of TGI Friday's, a family restaurant chain based in the United States, for 50 billion won ($40.6 million).
Lotte, one of the top ten conglomerates in Korea, signed a contract on Tuesday with HSBC Private Equity to buy a 70 percent stake in Food Star Co., the Korean operator of TGI Friday's. With a 75 percent stake, HSBC Private Equity was the largest shareholder of Food Star.
"We plan to operate TGI Friday's as a separate entity," a Lotte official said. "But no further plans have been laid out."
Three subsidiaries of Lotte will shoulder the investment: Lotte Hotel is chipping in 20 billion won; Lotte Shopping will put in another 20 billion won; Lotteria, the group's fast food chain, will invest 10 billion won.
Lotteria was the leader in the fast food restaurant market last year with 600 billion won in revenue. McDonald's was second, recording 270 billion won in revenues.
TGI Friday's was the largest family restaurant chain in Korea last year, posting 79 billion won in revenues. Bennigan's followed with 55 billion won.
Aside from the latest takeover, Lotte Group has rapidly expanded its businesses in recent years.
In 1999, Korea Seven Co., which runs the 7-Eleven convenience stores throughout Korea, took over Lawson, another convenience chain; and Lotte Chilsung Beverage Co. bought a beverage division from Cheil Jedang Corp. in 2001.
Lotte Shopping recently was nominated as the priority negotiation partner in the takeover of Midopa, a bankrupt department store.
TGI Friday's, a multinational food chain, was founded in New York in 1965. It entered the Korean market in 1992; there are 20 branches in Korea.