Due to Strict Regulations... Korea's M&A Only One-Third of Japan's

Comparison of FKI's M&A Performance Over the Past 10 Years
1063 Deals in Korea, Less Than Half of the G5 Average
Amount Also at Only 25% Level

‘3202 vs 1063’.

This represents the number of global mergers and acquisitions (M&A) deals by Japanese and Korean companies over the past decade. Korean companies' M&A activity amounts to only one-third of Japan's. This indicates that domestic companies' global investments are relatively low, potentially weakening their global competitiveness. Notably, there were no M&A deals in new industries such as healthcare, classified as future growth sectors. Given that Korea's stringent corporate regulations have contributed to this crisis, there are calls for urgent and bold regulatory relaxation.

According to the Federation of Korean Industries on the 10th, over the past 10 years, the number of M&A deals by Korea's top 100 non-financial companies by revenue was 1,063, which is only 41% of the average (2,598 deals) among the five major countries (G5) including the United States, Japan, France, Germany, and the United Kingdom. Among the G5, the United States (3,350 deals) and Japan (3,202 deals) showed overwhelming dominance with over 3,000 deals each. Following them were France (2,764 deals), Germany (1,967 deals), and the United Kingdom (1,707 deals). Korea's figure was only 62% of the United Kingdom, the lowest among the G5.

The gap in deal value was also significant. During the same period, Korea's M&A deal value was $273.7 billion, only 25% of the G5 average ($1.093 trillion). The United States recorded $2.8815 trillion, more than ten times Korea's amount, and Japan ($884.7 billion) was three times larger. Korea's figure was only half that of France ($526.2 billion), the lowest among the G5.

Korean companies' M&A activities were mostly concentrated in traditional industries such as industrial goods. There was not a single M&A deal in so-called future growth 'new business' sectors like healthcare. This suggests that in the fiercely competitive global environment, Korean companies are blocked from survival pathways and are falling behind in securing competitiveness.

Experts point out that regulations should be actively relaxed to promote corporate entry into new industries through M&A. Unlike other countries, in Korea, when promising small and medium-sized venture companies are incorporated into large business groups, they become subject to various large business group regulations such as holding company regulations and prohibitions on support activities between affiliates.

Yoo Hwan-ik, head of the Industry Division at the Federation of Korean Industries, emphasized, "Korea has excessively high M&A barriers due to institutional environments," and added, "Related regulations should be relaxed so that competitiveness in new industry sectors can be secured through active M&A."

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