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THE INVESTOR
January 16, 2018

Deals

M&A deals hit US$26b on restructuring wave

  • PUBLISHED :July 21, 2017 - 18:03
  • UPDATED :July 21, 2017 - 23:47
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[THE INVESTOR] Mergers and acquisitions in Korea clocked US$26 billion in the first half of the year as against US$24.7 billion in the same period last year, as many conglomerates are reorganizing themselves to a holding company structure, according to Mergermarket on July 21.

Lotte Group adopted a holding company structure by merging the investment divisions of four listed subsidiaries -- Lotte Confectionery, Lotte Shopping, Lotte Chilsung Beverage, and Lotte Food. Worth US$2.8 billion, the deal was considered the most valuable in the first half of 2017.

The third-largest deal of the year was Hyundai Robotics’ acquisition of a 14.49 percent stake in Hyundai Heavy Industries for US$1.3 billion, which was also a part of its restructuring efforts. In June, Hyundai Robotics, which acts as a holding entity for non-shipbuilding units of HHI, exchanged newly issued stocks worth US$1.57 billion in return for shares in HHI and Hyundai Construction Equipment.

Particularly in industrials and chemicals industries, the amount of deals struck hit US$7.7 billion, the highest since 2001, according to the data. This accounted for almost 30 percent of total M&A activities.

Financial services was the second most targeted sector in the first half year of this year worth US$6.8 billion, down 2 percent by value. But in terms of transactions, the number has increased from 2016.

Inbound activity increased 2.4 times by value to US$3.9 billion from US$1.6 billion a year ago, but it decreased in terms of the deal count from 29 to 25.

Chinese investment in Korea reached US$1.5 billion to record the largest amount from that country since Mergermarket began track data in 2001. But some Chinese investors may be discouraged to invest overseas as regulators have stepped up supervision in recent months, Mergermarket warned.

Meanwhile, Korean investors made outbound investment worth US$2.7 billion in 30 foreign companies. This is double the value compared to the first half of 2016 which stood at US$1.4 billion. By region, the US was the most attractive investment destination.



By Park Ga-young (gypark@heraldcorp.com)
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