The Highest Level in 11 Years
The number of mergers and acquisitions (M&As) registered with the Fair Trade Commission (FTC) reached the highest level in 11 years in 2018. However, the aggregate value of the deals decreased due to the absence of big deals like the 9.3 trillion won purchase of Harman International by Samsung Electronics Co.
The number of M&As came to 702, according to the data released by the FTC on March 5. It was the highest figure since the 857 cases in 2007. Reorganization in companies with total assets or annual turnover of 300 billion won (US$266.31 million) or more and the M&A targets with total assets or annual turnover of 30 billion won (US$26.63 million) or more must report the changes to the FTC for approval.
M&A activities in the country last year were at their fullest in 11 years in terms of number of deals but they showed a downward trend in terms of the value of the deals. The combined value of M&A deals stood at 486.60 trillion won (US$431.96 billion) last year, down from 593.60 trillion won (US$526.94 billion) in 2016, 509.40 trillion won (US$452.20 billion) in 2017.
In fact, the number of small-scale mergers between domestic companies reached 570last year, up 56 from a year ago. However, the combined value of the deals fell from 53.80 trillion won (US$47.76 billion) to 43.60 trillion won (US$38.70 billion). The number of mergers involving foreign companies buying Korean firms dropped from 208 to 154, with the combined value falling from 455.60 trillion won (US$404.44 billion) to 443 trillion won (US$393.25 billion).
The number of mergers by conglomerates surged from 135 to 208, with the combined value growing from 18.90 trillion won (US$16.78 billion) to 22.50 trillion won (US$19.97 billion). This was largely due to the fact that conglomerates accelerated the pace of governance improvement after the government put pressure on them to prevent unfair intra-group trading and owner families’ pursuit of private interests.