Studies show that South Korea falls behind China and Japan in terms of large cross border mergers and acquisitions (M&As).
Hyundai Research Institute Senior Research Fellow Chung Min and Research Fellow Han Jae-jin published a report titled “Characteristics of Cross-border M&As between Korea, China, and Japan in the Past Decade and Its Implications” on June 30. The report shows an analysis of cross-border M&As in six industries, including the manufacturing and service industries, from 2005 to 2014. Cross-border M&As are defined as M&As that involve an acquiring firm and a target firm which headquarters are located in different home countries.
For over US$1 billion (1.12 trillion won) worth of large M&A deals in the last 10 years, China and Japan had 94 and 91 deals, accounting for 3.6 and 4.3 percent, respectively, of total cross border M&As. For more than US$5 billion (5.58 trillion won) worth of big cross-border M&A deals, China had 5 deals, while Japan had 13.
However, Korea has had only 15 M&A deals worth over US$1 billion (1.12 trillion won), accounting for 1.8 percent of the total. Also, there were no deals worth more than US$5 billion (5.58 trillion won).
Moreover, the size of cross-border M&As per case involving Korea was smaller than both China and Japan.
The figure peaked in 2010 with US$140 million (156.28 billion won) from US$24 million (26.79 billion won) in 2005. Then, it decreased to US$85 million (94.89 billion won) in 2014.
China had shown a steady increase from US$73 million (81.49 billion won) in 2005 to US$160 million (178.61 billion won) in 2014. Japan had seen fluctuations for 10 years and recorded nearly US$150 million (167.45 billion won) in 2014.