Overseas Acquisitions
A Lotte Hotel will exist on the main street of Manhattan in New York City. The Lotte Group announced on May 31 that it had signed a contract to purchase the New York Palace Hotel in Manhattan for US$805 million (900 billion won).
Hotel Lotte Co., Ltd. will establish a new company that will acquire and manage the hotel by the end of Aug.
Accordingly, Hotel Lotte is to become the nation’s first brand hotel to operate on the main street of Manhattan in New York City. Located at the center of Manhattan in Midtown at the corner of Madison Avenue, the New York Place is a luxury hotel with a modern 55-story tower that features 909 rooms and suites and 23 ballrooms.
The New York Palace Hotel possesses a prestigious heritage. It is the mansion that Henry Villard, a well-known railroad financier in the U.S., had lived about 133 years ago. In 1982, Harry Helmsley, an American real estate billionaire, remodeled the Villard Houses into The Helmsley Palace Hotel. In 1993, the hotel was purchased by the Sultan of Brunei, and the new owner changed the name to the New York Palace. An official from Lotte said, “Chairman Sihn showed his strong will to acquire the New York Palace Hotel.”
With the takeover of the New York Palace, Hotel Lotte enhanced its position as a global hotel chain. The company has been opening and buying hotels in Moscow of Russia, Ho Chi Minh and Hanoi of Vietnam, Tashkent of Uzbekistan, and Guam of the U.S since 2010. Currently, it is constructing hotels in Shenyang, Yantai, and Chengdu in China, and Yangon of Myanmar. Also, the company is in the process of renovating the hotel after it acquired it in Saint Petersburg, Russia.
Industry sources say that the Lotte Group will continue seeking such M&A opportunities for the foreseeable future. This year, the Lotte Group invested 6 trillion won (US$5.41 billion) in bidding for duty-free shops in Incheon International Airport, and purchased KT Rentals for more than 1 trillion won (US$901.55 million). The company is also in the process of an additional M&A for a large shopping mall in Russia. This year, the Lotte Group secured a budget of 7.5 trillion won (US$6.76 billion), the largest of all time, for investment.