Lotte Group’s decision to acquire chemicals businesses from Samsung Group, which was announced Friday, is expected to help the food and retail giant extend its business portfolio.

And more importantly the 3 trillion won ($2.6 billion) pricey deal put a renewed spotlight on business capabilities of chairman Shin Dong-bin, who has recently been engulfed in an escalating family feud over the group’s ownership.

Lotte said it would acquire 31.5 percent of shares in Samsung Fine Chemicals, Samsung’s last remaining chemicals unit after its sell-off of four chemicals and defense units to Hanwha Group last year.

With the acquisition, Lotte Chemical aims to produce more value-added chemicals products and fend off enhanced competition with Chinese rivals.

The group is also strengthening its manufacturing businesses when its flagship food and retail businesses suffer from slowing sales amid weakening domestic consumption.

According to industry sources, Shin proposed the deal directly to Samsung Electronics vice chairman and the group’s heir apparent Lee Jae-yong in July, right before he clashed with his elder brother Shin Dong-joo, chairman of SDJ Corp.

“While his brother was upping the offensive against him, Shin focused on the group’s pending issues. That would allow him an upper hand in the ongoing ownership battle,” said an industry official.

The deal, in particular, showcased Lotte’s closer ties with Samsung, the nation’s largest conglomerate.

Even after the acquisition, Samsung SDI, the group’s battery unit, agreed to maintain a 10 percent stake in a new chemicals company by 2018 that would be set up under Lotte’s control.

Since being named the group’s head of policy division in 2004, Shin has played a key role in elevating Lotte to become the nation’s No. 5 conglomerate.

Amid skepticism, he led the stock debut of Lotte Shopping, the group’s flagship retail unit, in 2006 both in Korea and the U.K. The newly secured 3.5 trillion won cash was used to pave the way for Lotte’s global expansion.

This year alone, Shin led several acquisitions such as KT Rental and New York Palace Hotel, each worth about 1 trillion won.

Over the last decade, Lotte’s sales have surged to an estimated 91 trillion won this year from 23 trillion won in 2004.

“Shin has led the group’s business expansion. The Samsung deal came at the right moment for him to shine,” the official said.

On Friday, shares of Lotte Chemical dropped 13.8 percent to close at 240,500 won following the acquisition announcement made early in the morning, largely due to the pricey deal’s uncertain profitability.

But industry watchers predict a rebound in the coming months, citing several sell-off cases by Samsung. 

Hanwha Group also suffered an almost 20 percent plunge in shares after acquiring chemicals and defense units from Samsung last year. But now that Hanwha Chemical has gained more than 70 percent before the acquisition, Hanwha Techwin has also seen a 10 percent rebound.

“The deal would allow Lotte Chemical to improve production efficiency. The acquisition price is also considered not too high in a longer term,” said Kwon Young-bae, an analyst at Mirae Asset Securities in a report. 

By Lee Ji-yoon (jylee@heraldcorp.com)