To Drive Future Growth
Last year, the top 10 South Korean business groups signed 20 M&A deals despite COVID-19 in order to ensure their future growth. For instance, SK Hynix acquired Intel’s NAND flash business unit for 10.3 trillion won in October last year. Hyundai Motor Group signed two major deals, that is, Boston Dynamics and GM’s manufacturing plant in St. Petersburg. The former deal is estimated at one trillion won.
LG Chem, the third-largest in market cap, took over a TV manufacturing plant in Wroclaw, Poland in March. The purpose of the takeover is to expand its electric vehicle battery manufacturing facilities with the European electric vehicle market expected to grow rapidly. In January, Samsung Electronics acquired U.S. network services provider TeleWorld Solutions. In June, Celltrion acquired the Asia-Pacific business of Takeda Pharmaceutical Company.
Naver and Kakao signed an overwhelming number of contracts. Specifically, Naver signed six and Kakao signed eight for M&A-based business diversification. Naver acquired AI startups as well as a game company and a women’s clothing shopping mall.
“The combined value of the 20 deals is 47.6 trillion won, up 15 percent from a year ago,” the Federation of Korean Industries explained, adding, “More M&As are anticipated this year with COVID-19 accelerating industrial structural changes.”
2020 M&A records of major South Korean conglomerates
Kakao Acquires Eight Companies Alone
It is Kakao that signed more contracts than any other. The contracts include those with an e-book publisher, a drama production studio and a golf course builder.
Most of the contracts were signed in the first quarter. In the second and third, when COVID-19 was spreading most rapidly, the business groups kept a low profile to avoid further uncertainties. In the fourth, they resumed the activities with vaccines being developed and the pandemic becoming a kind of routine.