Recent data shows that South Korea’s top revenue-generating corporations have collectively invested a total of 4.5 trillion won (US$3.38 billion) in stakes in other companies, including ventures and startups, over the past 2 years and 6 months. The sector that received the highest concentration of investments was the content and entertainment industry.
According to an analysis conducted by Leaders Index, a business analysis research institute, on Sept. 12, out of the top 500 companies in terms of revenue, 354 that submitted their semi-annual business reports in the first half of the year were examined. The results showed that 298 of these companies had acquired stakes in other companies from 2021 through the first half of 2023. The total investment amount was reported to be 20.77 trillion won based on the acquisition cost.
Out of the total, indirect investments, including investment associations, accounted for 78.6 percent, amounting to 16.34 trillion won. The number of companies engaged in indirect investments was 2,922. On the other hand, there were 844 companies that directly acquired stakes with a total direct investment amount of 4.52 trillion won.
The amount of direct investments by major conglomerates in other companies has been showing signs of recovery this year. In 2021, the figure stood at 2.12 trillion won, but it decreased to 1.3 trillion won due to the global tightening trend last year. However, they have already made direct investments totaling 1.1 trillion won in just the first half of this year, indicating a growing trend.
An analysis of the industries of companies that received direct investments from major corporations revealed that investments in the content and entertainment sector were the largest, totaling 1.14 trillion won. This was followed by the secondary battery sector with 1.04 trillion won and the aerospace and transportation sector with 477 billion won. In the case of the content and entertainment sector, the significant increase in direct investment is attributed to Hive’s acquisition of a 14.8 percent stake in SM Entertainment for 422.8 billion won earlier this year.
The pharmaceuticals and biotechnology sector saw the highest number of companies invested, with a total of 173 companies receiving direct investments from major conglomerates. Following closely were artificial intelligence (AI) and big data with 122 companies, and the content and entertainment sector with 99 companies.