New Mega-sized IB
As Mirae Asset Daewoo Securities Co., former Daewoo Securities, successfully completed the merger with Mirae Asset Securities, it has been reborn as a mega-sized investment bank (IB) with equity capital of 6.6 trillion won (US$5.9 billion). The ambitious challenge of Mirae Asset Group chairman Park Hyeon-joo, who plans to foster the integrated company as “Goldman Sachs” and “Nomura Securities” in South Korea, is expected to be put to the test in earnest from now on.
Mirae Asset Daewoo, the integrated securities firm with merger between Daewoo Securities and Mirae Asset Securities, announced that it finished the merger process and is officially launched on December 29. It took a year after Mirae Asset Securities was selected as a preferred bidder for Daewoo Securities on December 24 last year unlike market expectations.
Mirae Asset Daewoo plans to expand additional equity capital even after the merger and compete with global IBs in earnest. To this end, the company will increase its capital to 8 trillion won (US$7.2 billion) by next year through this year’s net profit of 300 billion won (US$270 million) and the sale of the integrated firm’s treasury stocks worth one trillion won (US$900 million). It will also plans to expand its capital to 10 trillion won (US$9 billion) by 2020.
To be sure, Mirae Asset Daewoo still has a long way to go. Its equity capital still falls far short of 91 trillion won (US$81 billion won) of Goldman Sachs and 28 trillion won (US$25 billion) of Nomura Securities in a bid to compete with global IBs. This is why the company needs to add more capital. In addition, the market situations next year are not favorable, such as the economic slump in emerging countries and political uncertainties at home and abroad. It still has another problem to solve, combining the two corporate cultures.