41+ Subsidiaries of Large Business Groups... "Impact of New Business Ventures and Business Structure Reorganization Due to COVID-19 Performance Decline"

Fair Trade Commission, Status of Changes in Subsidiaries of Large Business Groups

[Sejong=Asia Economy Reporter Joo Sang-don] The number of subsidiaries under large business groups has increased by 41 over the past three months. This is interpreted as a result of entering new technology sectors to secure future growth engines, as well as business restructuring to alleviate poor performance caused by COVID-19 and strengthen competitiveness.

On the 3rd, the Fair Trade Commission disclosed changes in the subsidiaries of large business groups that occurred between May 1 and July 31.

As of the 31st of last month, the total number of subsidiaries under large business groups was 2,653, up 41 from 2,612 on April 30. The groups with the most newly added companies were Janggeum Shipping (13), Kakao (13), and SK (11). The groups with the most excluded companies were SM (5) and MDM (5).

There were many changes in affiliates of large business groups due to entry into new technology business sectors to secure and preempt future growth engines. Hanwha and Hyosung each newly established Enterprise Blockchain and Galaxia Metaverse, which operate blockchain-related businesses. Hankook Tire newly established MW Holding and MW & Company for investment and support businesses related to new technology sectors. SK acquired Korea Exchange Systems, a real estate big data company, and The Biz, a real estate information disclosure company, and purchased shares of YLP, a freight transport big data company.

Eugene became the largest shareholder of Junggonara by acquiring shares through an affiliated private equity fund. However, Junggonara is exempted from affiliate inclusion for seven years as a small and medium venture business. Coupang established Coupang Eats Service to respond to the nationwide expansion of Coupang Eats and to support customers, stores, and delivery workers.

Business restructuring to organize sectors with poor performance after COVID-19 and to strengthen the competitiveness of core businesses also continued. Hanwha spun off the food and beverage business of Hanwha Hotels & Resorts to establish The Tastable. SK sold all shares of SKC Eco Solutions, which operates solar cell-related businesses, and SK TNS, which operates telecommunications construction businesses. KT sold all shares of KT Powertel, which manufactured and sold walkie-talkies, to focus on IT telecommunications and new business sectors. In addition, business restructuring within groups was active, with 21 companies merged or absorbed in 14 groups including Lotte.

Preparatory work for affiliate separation of companies related to Koo Bon-joon (uncle of the same person Koo Kwang-mo) for independent family management from LG also progressed. In May this year, the holding company LX Holdings was spun off from LG, and in June, five companies scheduled for affiliate separation changed their names.

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