Foreign IBs’ Dominance
It was found that foreign investment banks (IB) monopolized the domestic M&A advisory market. In the M&A legal advisory market, Law Firm Lee and Ko overtook Kim & Chang Law to claim the number-one position.
According to the domestic M&A league table in the first quarter of 2016 released by Bloomberg on April 7, Credit Suisse topped the list by managing US$4.81 billion in four M&A deals in the financial advisory sector.
Credit Suisse served as an advisor for the seller in Mirae Asset Securities’ acquisition deal of Daewoo Securities for US$1,995 million, which was the biggest deal in the first quarter. The Swiss financial company also took part in the Kakao’s takeover of equities in Loen for US$1,468 million and the MBK Partners’ purchase of Doosan Machine Tool for US$920 million.
BoA Merrill Lynch took second place by helping Korea Investment Corporation (KIC) take over six hotels including Ritz-Carlton and Four Seasons Hotel in the US for US$330 million. The BoA Merrill Lynch also served as an advisor for the buyer in the MBK Partners’ acquisition of Doosan Machine Tool.
The third place went to Barclays that worked as a lead manager for the Glenwood-Baring Consortium’s takeover of Lafarge Halla Cement for US$54 million. Nomura and Morgan Stanley shared fourth place. The two firms worked as lead mangers of the buyer and the seller, respectively, in the sale of Dongbu Farm Hannong to LG Chem. LG Chem paid US$426 million for Dongbu Farm Hannong.
As a consequence, foreign IBs nabbed all of the top five places in the domestic M&A financial advisory market. Among Korean consulting firms, Samil PwC towered with US$1990 million for four deals over others. “During the first quarter, foreign IBs swept top deals, giving rise to a stark contrast to the fact that Korean securities firms dominated the M&A advisory market during the same span of last year,” said a representative of the M&A Team at Bloomberg. “In fact, Samil PwC, Hana Financial Investment and NH Investment & Securities came in first, second and third in the third quarter of last year.”
In the legal advisory sector, Law Firm Lee and Ko (US$3,623 million) beat Law Firm Shin and Kim (US$3,400 million) and Law Firm Kim and Chang (US$3,100 million) to rank No. 1 in terms of transaction amounts. They were followed by Law Firm Yulchon and Law Firm Bae, Kim and Lee that chalked up US$2,900 million and US$2,000 million, respectively.
On the other hand, in the first quarter of 2016, the Korean M&A market amounted to US$15.8 billion, up 33.1 percent from a year before and deals swelled 41.2 percent year on year to 339. By transaction type, the number of purchases of equities from minor shareholders totaled 182, the highest, followed by deals between nations (103) and company takeovers (54).