Seoul: South Korea's antitrust watchdog announced its decision to block a Singapore-based private equity fund from acquiring the country's largest vehicle rental company, citing concerns over market competition. The Fair Trade Commission (FTC) revealed that Careena Transportation Group Ltd., managed by Affinity Equity Partners, has been prohibited from purchasing a 63.5 percent stake in Lotte Rental Co. due to Affinity's existing ownership of SK Rent-a-Car Co., South Korea's second-largest rental car operator.
According to Yonhap News Agency, the FTC's statement highlighted the risk of substantially restricting competition, including potential price hikes in the domestic rental car market, leading to the prohibition of the merger. The commission emphasized that the acquisition would effectively place control of the nation's top two car rental companies under the same private equity firm, resulting in increased market concentration.
The watchdog expressed concern that the transaction would adversely affect both the short-term and long-term car rental markets. As of the end of 2024, the combined market share of the two companies stood at 29.3 percent in the short-term rental market on the mainland and 21.3 percent on Jeju Island, with most of the remaining competitors being small operators. In the long-term rental market, their combined market share reached 38.3 percent at the end of 2024, showing an upward trend over the past five years.
The FTC warned that eliminating competition between the two leading firms could lead to anti-competitive effects, such as increased rental fees. The commission also conveyed that the decision serves as a strong warning against private equity firm-led mergers that could distort fair competition by rapidly consolidating market power, with the intent of reselling at higher valuations.