2325 Subsidiaries of Large Business Groups... Increase of 24 Companies

[Asia Economy Reporter Moon Chaeseok] The Fair Trade Commission's investigation into changes in affiliated companies of large business groups over the past three months revealed an increase of 24 companies.

The number of affiliated companies in 64 large business groups subject to disclosure with assets exceeding 5 trillion KRW rose from 2,301 as of July 31 to 2,325 as of last month’s 31st, an increase of 24 companies.

Fifty-six companies were newly affiliated through company establishment and equity acquisition, while 32 companies were excluded due to mergers and acquisitions or equity sales.

IMM Investment Tops with 7 Newly Affiliated Companies

Source=Korea Fair Trade Commission

During this period, the business groups with the most newly affiliated companies were IMM Investment (IMM Inbe) with 7 companies, followed by Kakao with 5. The groups with the most excluded companies were Korea Investment Financial with 5 and Daelim with 3.

The reasons for affiliation were company establishment (27 new, 3 spin-offs) and equity acquisition (15), in that order.

The reasons for exclusion were mergers and acquisitions (12), equity sales (7), and liquidation completion (6), among others.

Taeyoung, Celltrion, etc. affiliated companies through holding company establishment for governance restructuring

Among the affiliation cases, some involved establishing holding companies for governance restructuring or acquiring equity for business expansion.

Taeyoung converted to a holding company system by spinning off Taeyoung Construction and establishing TY Holdings. Celltrion also established Celltrion Healthcare Holdings, the holding company of Celltrion Healthcare, to solidify its holding company structure.

Kakao strengthened its content business by having its affiliate Kakao Page acquire equity in four companies: Bakwae Research Institute, Pilryeon Management, Battle Entertainment, and Intime.

There were also cases of affiliation through acquiring control or equity in financial companies or changing from non-financial to financial sectors.

KT’s affiliate BC Card became the largest shareholder (34% equity) of K Bank, leading to K Bank’s affiliation. BC Card converted non-voting convertible shares into common shares.

NongHyup, Mirae Asset, Korea Investment Financial, IMM Investment, and Daou Kiwoom each affiliated financial companies by participating as general partners (GPs) to acquire control.

Eugene’s Eugene Private Equity changed its industry classification from non-financial to financial. Previously classified as non-financial (management consulting), it changed its main industry to financial considering private equity fund management revenue, etc.

Inter-Group Equity Transactions and Independent Family Management Lead to Exclusion from Affiliates

In exclusion cases, changes in affiliated groups occurred due to equity transactions between large business groups or recognition of independent family management, resulting in companies leaving the business groups.

Korea Investment Financial sold all shares of Dreamline, Dream Mark One, and Dreamline Solar Power No. 2 to IMM Investment. Executives also resigned. Consequently, these three companies were excluded from Korea Investment Financial and newly affiliated with IMM Investment.

In Kakao’s case, Build J, operated by a family member of the same person, was excluded from the business group due to independent management.

This content was produced with the assistance of AI translation services.