34 Large Conglomerate Affiliates Increased in 3 Months... SK Up by 16

As of Last Month, 2,738 Large Corporation Affiliates... Increased by 34 in 3 Months
Notable Establishment and Acquisition of Environmental Companies... Impact of ESG Expansion
694 Subject to Private Interest Appropriation Regulations... Excluding Samsung Life Insurance and Others

View of SK Seorin Building, the headquarters of SK Group in Jongno-gu. Photo by Moon Honam munonam@

[Asia Economy Sejong=Reporter Lee Jun-hyung] Over the past three months, the number of large conglomerate affiliates has increased by 34, mainly in the environmental sector, following the spread of ESG (Environmental, Social, and Governance) management.

According to the "Status of Changes in Subsidiaries of Large Business Groups from November 2021 to January 2022" announced by the Fair Trade Commission on the 3rd, the total number of subsidiaries belonging to 71 large business groups was 2,738 as of the end of last month. This is an increase of 34 from 2,704 at the end of October last year, three months ago.

During the recent three months, 47 large business groups experienced changes in their subsidiaries. A total of 112 companies were incorporated as affiliates of large conglomerates through company establishment, equity acquisition, and other means. Meanwhile, 78 companies were excluded from large conglomerate affiliates due to mergers, equity sales, and other reasons.

The large business group with the highest number of newly incorporated companies was SK (16 companies), followed by Kakao (12 companies) and Taeyoung (10 companies). During the same period, the groups with the most excluded affiliates were Kakao (10 companies), Hanwha (7 companies), and Korea Investment & Finance (6 companies).

Specifically, company establishment and acquisition in the environmental sector stood out. SK acquired shares in three companies, including the waste treatment company Dosihwan-gyeong, from Korea Investment & Finance. SK also newly established EcoVance, a biodegradable plastics manufacturer. Taeyoung acquired shares in three companies, including the waste treatment company Ecobit Energy. These moves are interpreted as efforts to strengthen business competitiveness in the environmental sector in line with the ESG management trend.

With the spread of the 'stay-at-home' culture due to COVID-19, business restructuring to strengthen cultural content and online service sectors was also active. CJ acquired shares in the film production company Yong Film. Kakao acquired partial shares in two film production companies, including Yeonghwasajip, and three advertising agencies, including Studio Joe. KT spun off KT Season, an online video service (OTT) operator. KT Season Media was merged into KT Studio Genie, a content production company.

To enhance business competitiveness, mergers and acquisitions of similar or related business affiliates within the same corporate group also took place. Kakao merged four game development companies, including Epic Studio, into H&C Games. DL (formerly Daelim) merged Daelim P&P, a petrochemical product sales company, into DL Chemical, a petrochemical product manufacturer.

According to the amended Fair Trade Act, the number of business groups and companies subject to self-dealing regulations was counted at 694. The amendment to the Fair Trade Act, which took effect at the end of last year, focuses on strengthening the criteria for conglomerate designation and expanding the scope of self-dealing regulations. The regulation targets affiliates with a controlling family shareholding of 20% or more and subsidiaries in which these companies hold more than 50% of shares. Samsung Life Insurance, Hyundai Glovis, and others were excluded from the self-dealing regulation targets as the controlling families disposed of their shareholdings.

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