Fair Trade Commission: "Large Corporations Actively Utilize Mergers to Create New Business Opportunities"

Trends in Corporate Mergers in the First Half of 2021

[Asia Economy Reporter Joo Sang-don] It has been revealed that large business groups are actively utilizing mergers and acquisitions as a strategic means for financial investments such as participation in private equity funds (PEF) or for creating new business opportunities.

The Fair Trade Commission analyzed and announced the trends in merger reviews during the first half of 2021.

The number of mergers in the first half of this year was 489, with a total amount of 221 trillion won, representing an increase of 65 cases (15.3%) and 72.4 trillion won (48.7%) compared to the same period last year.

Mergers by domestic companies significantly increased (66 cases, 18.5%), and especially mergers by large business groups surged (91 cases, 86.7%), driving the overall growth trend.

Among mergers by large business groups, mergers between non-affiliated companies increased by 93.3% (70 cases) compared to the same period last year, continuing the upward trend from last year.

Mergers between foreign companies and domestic companies amounted to 18 cases (3.6 trillion won), with both the number of cases (8 cases, 80.0%) and the amount (3.2 trillion won, 800.0%) increasing, recovering to the 2019 level (19 cases, 3.7 trillion won).

By industry (based on the acquired company), the service sector accounted for the majority with 334 cases (68.3%), while manufacturing accounted for 155 cases (31.7%). The service sector showed an increasing trend in both number and proportion, with particularly active fields being information and communication/broadcasting (35→52 cases, 48.6%) and logistics/transportation (13→23 cases, 76.9%).

In the manufacturing sector, increases were seen in industries such as semiconductors and other electrical and electronic products (23→44 cases, 91.0%), machinery and metals (36→46 cases, 27.8%), and petrochemicals and pharmaceuticals (37→39 cases, 5.4%↑).

A Fair Trade Commission official stated, "In the first half of this year, the proportion of conglomerate mergers without business relevance, known as conglomerate mergers (62.2%), was higher than horizontal mergers (31.1%) and vertical mergers (4.7%), which are mergers in similar or adjacent fields. This indicates that companies are actively using mergers and acquisitions as a means to enter or invest in new fields different from their existing business areas."

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