Stingy Chaebol
The 30 major Korean business groups have invested 29.19 trillion won (US$26.63 billion) combined for the past five years in M&As with 203 companies.
Industry experts and investment banks point out that their M&A deals have been rather small in scale and focused on domestic companies. Intel is estimated to have spent no less than 8 trillion won (US$7.3 billion) at the least on M&As between 2012 and 2014, equivalent to nine to 10 times Samsung Electronics’ M&A investment for the same period.
The Korean groups’ M&A performance is easily eclipsed by those of Chinese and Japanese companies, too. In the first quarter of this year, Japanese corporations set a new high in overseas M&A contract amounts. Chinese enterprises signed M&A deals worth US$164.1 billion in 2013, slightly less than 400 percent of the amount recorded by Korea during the period.
Korean companies have sufficient resources for more M&As, though. The internal reserves of the 10 major groups reach 530 trillion won (US$484 billion), including 200 trillion won (US$183 billion) in Samsung and over 100 trillion won (US$91 billion) in Hyundai Motor. Rumor has it that the Samsung Group is working on a large-scale international M&A in the non-memory semiconductor sector, and similar ones are being discussed by its financial subsidiaries such as Samsung Fire & Marine Insurance. It is also said that Korean financial holding companies are looking to acquire local financial firms in Southeast Asia, with their cash piling up due to the current low interest rates.