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THE INVESTOR
September 21, 2019
Big Reunion

Deals

Inbound M&As in S. Korea on rise in H1: FTC

  • PUBLISHED :August 26, 2019 - 11:55
  • UPDATED :August 26, 2019 - 11:55
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The volume of inbound mergers and acquisitions in South Korea approved by its antitrust body have been on the rise in the first half of 2019, data showed Aug. 26.

Foreign companies’ cross-border M&A transactions involving Korean entities came to a combined 3.7 trillion won ($3.04 billion) in the first half, up 12.1 percent from 3.3 trillion won the previous year, according to an estimate by the Fair Trade Commission. In the meantime, the number of transactions sat at 19, sharply down from 29 on-year. 


The FTC cited foreign buyers’ increasing appetite for industry sectors in Korea that had been largely untapped. Examples include US private equity firm Blackstone’s 100 percent acquisition of Korean drug wholesaler Geo-Young for 1.1 trillion won and Hong Kong-based private equity firm Anchor Equity Partners’ 45 percent acquisition of coffeehouse chain A Twosome Place for 202.5 billion won.

Such appetite largely came from the European Union and United States, the FTC added, as four out of 19 M&A deals came from EU nations and three were from the US.

This is part of the 189.2 trillion won in M&A transactions by foreign companies in the world, which required approval by the FTC in the first half. All M&A transactions involving foreign companies rose 23 percent on-year.

This trend comes in contrast to a decline in Korea’s corporate M&As.

Korean companies’ M&A transactions at home and abroad, approved by the FTC in the first half, dropped 41.2 percent on-year to 12.7 trillion won. In particular, acquisitions led by large corporations -- with a combined 5 trillion won in assets -- have been reduced to nearly a quarter on-year to 4.2 trillion won.

Korean companies’ outbound M&As -- of ones with 30 billion won in revenue in Korea -- rose nearly fivefold to 1.4 trillion won in 11 transactions, while domestic M&As nearly halved to 11.3 trillion won across 259 transactions.

The FTC is looking to approve M&A deals in the second half of 2019, including ones between LG Uplus and CJ HelloVision, SK Broadband and t-broad as well as Hyundai Heavy Industries Group and Daewoo Shipbuilding & Marine Engineering.

Moreover, the FTC vowed swift approval for Korean corporate M&As of firms devoted to materials, parts and equipment in order to keep conglomerates afloat amid the Korea-Japan trade spat.

By Son Ji-hyoung (consnow@heraldcorp.com)

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