KIC Overseas Investment Council "Discussion on Domestic Companies' Overseas M&A Market"

"Future Supply Chain Restructuring, New Business Expansion, and Secondary Market Growth Expected to Have Significant Impact"

The sovereign wealth fund Korea Investment Corporation (KIC) held discussions with overseas investment experts from domestic public institutions to review the current status of Korean companies' overseas mergers and acquisitions (M&A) and investment cases, and to discuss future investment prospects. On the 31st, KIC announced that it held the 46th meeting of the 'Public Institutions Overseas Investment Council (HaeTuHyeop)' at its headquarters in Jung-gu, Seoul.

On the afternoon of the 31st, the 46th meeting of the 'Public Institution Overseas Investment Council' was held at the KIC headquarters in Jung-gu, Seoul. [Photo by Korea Investment Corporation]

HaeTuHyeop is a consultative body established in 2014 under the leadership of KIC to enable domestic public institutions to create synergy in overseas investments. Investment officers from domestic central associations, mutual aid associations, and pension funds attended the meeting.

Lee Hae-jun, CEO of IMM Private Equity, who gave a presentation on the theme of "Outbound M&A of Korean Companies," stated, "The overseas M&A market of Korean companies is dominated by large corporations, but recently, deals led by mid-sized companies and tech firms have been on the rise." He added, "By country, the highest investment proportion is in U.S. companies, and since 2020, the transaction amount for M&A targeting U.S. companies has been continuously increasing."

Lee predicted that future overseas M&A by domestic companies will be influenced by supply chain restructuring, entry into new businesses such as tech and healthcare, and growth in the secondary market. In particular, regarding supply chain reorganization, the U.S.-centered supply chain restructuring movement, including the Inflation Reduction Act (IRA), is expected to lead to an increase in related M&A transactions in sectors such as ▲secondary batteries ▲semiconductors ▲biotech, and investments in local U.S. factories by key suppliers of large corporations are expected to increase.

Regarding the global private equity market status, he explained, "Although it has shown rapid growth over the past decade, recently, the scale of investment recovery through buyouts has decreased to the lowest level in 10 years," adding, "As distributions have become smaller than invested capital, global institutional investors are finding it difficult to make additional investments in buyout funds."

Senior attorney Ryu Myung-hyun of the law firm Sejong gave a presentation on "Cross Border M&A." He stated, "Cross-border M&A is similar in basic procedures and structure to domestic M&A, but laws and practices are applied differently." He also discussed specific M&A procedures and precautions when pursuing cross-border M&A.

Lee Hoon, Chief Investment Officer (CIO) of KIC's Investment Management Division, said in his opening remarks, "At a time when concerns due to high interest rates and geopolitical conflicts coexist with hopes for technological innovation such as artificial intelligence (AI), it is more important than ever to consider mid- to long-term investment strategies based on rational analysis." He added, "KIC will strive to be a stepping stone for domestic companies' overseas expansion and contribute to national economic development."

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