In response to Japan's export restrictions against Korea, state-run financial institutions will launch an acquisition financing support group to support Korean companies’ acquisition of overseas materials, parts and equipment producers.
The Financial Services Commission has decided to launch the “Overseas M&A Financing Consultative Group” by the end of August with the participation of three major state-run banks -- the Korea Development Bank, the Export-Import Bank and the Industrial Bank of Korea. The group will provide financial support to Korean materials, parts and equipment companies hit by Japan’s export regulation and help them take over overseas companies to secure key technologies and supply lines. In addition to state-run financial institutions, Korean branches of global investment banks will lend a helping hand to the group.
Those eligible for M&A support will include companies that newly enter the materials, parts, and equipment sector by setting up a new company or restructuring and diversifying their businesses. Acquisition funds will be provided to them, so they will be able to acquire key technologies for materials, components and equipment or secure their supply lines.
The size of M&A support funds will stand at 2.5 trillion won (1 trillion won from the Industrial Bank of Korea and 1.5 trillion won from the Korea Export-Import Bank). The Korea Development Bank will also raise 2.5 trillion won to support their business competitiveness.
The government will also give 5 percent to 10 percent corporate tax credits to companies that take over overseas firms.