'Faster Review of Ritz's Real Estate Acquisition... Decision on Corporate Merger Within 15 Days'

Fair Trade Commission Revises and Implements 'Merger Review Guidelines'
Adds 'Simple Investment Activities and Overseas Mergers Without Domestic Market Impact' to Simplified Review Targets

[Sejong=Asia Economy Reporter Joo Sang-don] From now on, whether the acquisition of real estate by Real Estate Investment Trusts (REITs) constitutes a merger will be decided within 15 days. This is because the Fair Trade Commission (FTC) has classified REITs' real estate acquisitions as simple investment activities and added them to the simplified review targets.

On the 29th, the FTC announced that it has revised the 'Merger Review Guidelines' to expand the scope of simplified reviews presumed to have no competition restrictions and will implement the changes starting from the 30th.

An FTC official explained, "As the number of merger notifications increases every year, mergers with little concern for competition restrictions will have simplified procedures to reduce the burden on companies, while mergers with significant competition concerns will be examined more thoroughly. Unlike general reviews, simplified reviews conclude within 15 days by verifying only factual matters without competition reviews such as market definition and market share analysis, significantly reducing the burden of document submission and review for companies." Typically, general reviews take a basic period of 30 days and can be extended by 90 days if necessary, taking up to 120 days.

The current simplified review targets are limited to six types: ▲ mergers between affiliates ▲ absence of control relationships ▲ mixed mergers between non-large companies and mixed mergers without complementarity or substitutability ▲ simple investment activities ▲ cases with voluntary prior review notifications ▲ and establishment of overseas joint ventures. Through this revision, the FTC added two items: cases where simple investment activities are clear and overseas mergers without impact on the domestic market.

The FTC judged that since REITs are companies established to distribute profits obtained through real estate investments to investors, the acquisition of operating real estate by REITs is considered a simple investment activity. The current review guidelines designate cases where simple investment activities unrelated to management objectives are clear as simplified review targets, so REITs' real estate acquisitions are included in the simplified review category due to their similar nature.

Additionally, overseas mergers without impact on the domestic market are also included in the simplified review targets. For example, if a Singapore-based investment company acquires shares of a company engaged in real estate development in Japan, or if a Japan-based personal auto loan company acquires shares of a Colombian personal auto loan company without plans to operate in Korea, these foreign companies merging with foreign companies located overseas will be subject to simplified review. Also, if a domestic construction company acquires shares of a local corporation established by another domestic construction company solely to carry out irrigation canal development projects in a specific region of Cambodia, this overseas merger by a domestic company will also undergo simplified review.

An FTC official stated, "With the expansion of simplified review targets through this revision, the review burden on companies will be reduced, enabling swift promotion of mergers and acquisitions (M&A) for investment activities of real estate investment companies and overseas market entry. We will continue to actively ease regulations on merger types with low competition concerns to streamline reviews."

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