Lotte mulls becoming third S.Korean brewer

SEOUL, June 16 (Reuters) - South Korean retail giant Lotte Group said on Tuesday it might build a brewery to become the country's third beer company, after it dropped out of a deal to buy Oriental Brewery (OB) earlier this year.

Last month, private equity firm Kohlberg Kravis Roberts & Co agreed to buy South Korea's No. 2 beer company OB from Anheuser-Busch InBev INTB.BR for $1.8 billion, with Lotte refusing to put in a final offer for pricing and other reasons.

"We are looking at several options and building a beer factory is one under consideration," Lotte Group spokesman Park Sang-sup said by telephone, adding the group had yet to make any detailed decisions.

Lotte, with its financial muscle, had been viewed as a strong candidate to acquire OB. Beer would complete its product line-up, which includes the popular local liquor soju and whisky.

But analysts had played down the likelihood of Lotte building a brewery business from scratch, considering the huge investment required and difficulty in penetrating a market dominated by Hite Brewery 103150.KS and unlisted OB.

(Reporting by Kim Yeon-hee; Editing by Jonathan Hopfner)