Doing Business in Korea

Korean News - M&A deals in S. Korea triple over two years
µî·ÏÀÏ : 2015.11.10 10:26 Á¶È¸¼ö : 1136
South Korea is experiencing an unprecedented boom in the M&A market, pushing the estimated sale of major candidate companies on the seller¡¯s list to 23 trillion won ($19.95 billion). 

According to an exclusive analysis of market data by Maekyung¡¯s Ray the M on Sunday, total estimates of target companies, including those to be put on sale in the market, exceed 23.2 trillion won. Major companies on the list include Coway (estimated price of 3 trillion won), Hyundai Card and Hyundai Capital (2.7 trillion won), ING Life Insurance (2.5 trillion won), Daewoo Securities (2.5 trillion won) and Korea Aerospace Industries (2.4 trillion won). 

M&A deals in Korea, which were valued at 7.18 trillion won in 2013, jumped to 21.57 trillion won last year. The corresponding figure for so far this year stands at 18.32 trillion won. 

In particular, M&As triggered by industrial restructuring grow each year, posting 3.77 trillion won in 2013, 5.23 trillion won in 2014 and 6.71 trillion won in 2015. 

The local M&A market will continue to expand as big M&A deals between conglomerates and business rearrangements are on the rise. 

An industry source said big M&A deals between conglomerates are indispensable because Korean companies are pursuing business expertise and enlargement. 

Adding to the local M&A market are large companies seeking to improve their financial health by selling business units and creditor banks willing to collect their loans by selling stakes in private companies. 

Among large companies, Doosan, Hyundai, Dongbu and LS are active in trying to sell their businesses. 

Doosan Group is working to sell Doosan Infracore¡¯s machine tool business and Doosan DST to prop up its financial condition. The conglomerate has recently raised 700 billion won through Bobcat Holdings¡¯ pre-IPO placement. 

Hyundai Group will try to sell Hyundai Securities soon after a failed attempt. 

Dongbu Group is set to complete its sale of Dongbu Pharm Hannong soon, while the group¡¯s former affiliates --Dongbu Express, Dongbu E&C and Dongbu Steel -- are looking for new owners. 

Companies owned by KDB and other creditors are being poured into the market. The government fueled the local M&A market by announcing that the sale of KDB¡¯s 16 non-financial affiliates, including Daewoo Shipbuilding & Marine Engineering, will begin from early next year. 

Big name companies creditor banks want to sell include Daewoo Securities, Ssangyong Cement and Dongbu Steel. Creditors also plan to sell Kumho Tire, Korea Aerospace Industries and Daewoo Shipbuilding & Marine Engineering as the sale of Kumho Industries was completed. 

There are some private equity funds that examine exit strategy. MBK Partners, Korea¡¯s leading PEF, are already on the track of selling or planning to sell Coway, C&M and ING Life Insurance. The sale of Dongbu Express, Doosan DST and Dongbu Pharm Hannong is also initiated by PEFs. 

¡°PEFs see the recent booming in the M&A market as a good opportunity to make a profit by collecting a return on their investment,¡± a PEF source noted.

Source: www.pulsenews.co.kr - Kang Doo-soon, Han Woo-ram - November 9th, 2015
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