Lotte Global Logistics Co. and Lotte Logistics Co. announced on Nov. 27 that they would be merged and launched as the Lotte Group’s integrated logistics firm.
The two companies held a board meeting on the same day and decided on the merger on March 1 next year. Lotte Global Logistics will remain after the merger while Lotte Logistics will cease to exist. The ratio of the merger will be 1:16.35 and the new name of the merged entity will be announced later.
The group said, “Lotte Logistics has logistics infrastructure and operation expertise in various areas, such as distribution, food and manufacturing, in South Korea, while Lotte Global Logistics has strengths in both rapidly growing delivery market and global business with networks in 12 countries around the world. Through the merger, we will be able to provide one-stop services in the entire logistics area ranging from foreign logistics to forwarding, domestic inland transportation, warehouse operation and last mile delivery.”
It also added, “We will strengthen our cost competitiveness and secure financial soundness for qualitative growth by creating an integrated synergy, including the merger of bases at home and abroad, optimization of delivery networks and realization of the economy of scale.”
The two companies are planning to establish 300 billion won (US$265.49 million) worth of mega hub terminal to secure the competitive in logistics, advance services and offer logistics services optimized to the group’s ecommerce business division based on the new merged entity to post 3 trillion won (US$2.65 billion) in sales. They will spur investment in “digital transformation” making use of advanced technologies, such as chatbot and big data, and are considering merger and acquisitions of companies in the region that can create a synergy at the group level like Vietnam and Indonesia.