Lotte Group, South Korea's fifth largest conglomerate, said Wednesday that it has been selected as the preferred bidder to buy local car rental company KT Rental.

After taking over the country's biggest car rental firm, Lotte will guarantee the employment of KT Rental employees, the group said.

Lotte said the latest acquisition is aimed at expanding the car rental service into its new growth engine.

The group, whose business portfolio ranges from beer and beverages to department and discount stores, expects the local rental car market will rise an annual average of 10 percent in the future.

"KT Rental's growth potential is very high as it has No. 1 local car sharing company 'Green Car' under its wings along with the biggest business network among rivals," a group official said.

"The car rental business will create a synergy if it is linked with the group's existing retail, finance and tourism businesses."

KT Corp., the parent of KT Rental, put its 58 percent stake in the car-rental service firm up for sale in June 2014 to improve its financial health. The deal has been expected to fetch up to 800 billion won ($724 million).

Kyobo Life Insurance Co., South Korea's No. 2 life insurer, and five other financial investors hold the remaining 42 percent.

In late January, six bidders, including SK Networks Co. and private equity firm MBK Partners, had submitted their final bids to buy the car rental company.

KT Rental dominates the local market with a 26 percent share.

(Yonhap)