The Era of 100 Large Business Groups Begins... Toss, Line, Orion, Kolmar Korea, Korea Teachers' Credit Union, and 11 Others Join

Thanks to the global Korean Wave (Hallyu) boom and active mergers and acquisitions (M&A), companies such as Kolmar Korea and Orion have joined the ranks of large business groups in significant numbers. Fintech giant Toss and messenger-based Line also surpassed KRW 5 trillion in assets, newly joining the list of business groups subject to official disclosure requirements.

On April 29, the Korea Fair Trade Commission announced that, as of May 1, it will designate 102 business groups (comprising 3,538 affiliated companies) with total assets of at least KRW 5 trillion as public disclosure business groups. The number of designated groups this year has increased by 10 compared to last year (92 groups), and the number of affiliated companies has grown by 237. This is the first time that the number of large business groups with assets exceeding KRW 5 trillion has surpassed 100. Additionally, among the public disclosure business groups, 47 groups (comprising 2,088 affiliated companies) with assets exceeding KRW 12 trillion-equivalent to 0.5% of the most recent nominal gross domestic product (GDP) figure of KRW 2,408.7 trillion-have been designated as business groups subject to cross-shareholding restrictions.

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The most notable feature of this year’s designations is the rapid growth of companies driven by the expansion of their core industries and changes in the international economic landscape. Kolmar Korea was newly designated as a large business group due to increased sales in cosmetics, pharmaceuticals, and bio businesses fueled by the K-beauty boom. Orion was also newly designated, attributed to the expansion of overseas sales of its confectionery products.

Toss, which benefited from a bullish stock market, expanded its assets through the growth of its financial business and was added to the list of public disclosure business groups. Daou Kiwoom, which focuses on securities, was upgraded to the group subject to cross-shareholding restrictions. The rankings of existing large business groups with securities subsidiaries, such as DB (rising from 40th to 37th) and Daishin (from 76th to 69th), also improved. The Korea Teachers' Credit Union was newly designated for the first time ever among mutual aid associations, ranking 74th.

The 11 business groups newly designated as public disclosure business groups (Line, Korea Teachers' Credit Union, Woongjin, Shielders, Daemyung Chemical, Toss, Kolmar Korea, Heesung, Orion, QCP Group, and Iljin Global) will, from May 1, be subject to regulations, including disclosure obligations and the prohibition of providing undue benefits to related parties. For companies belonging to business groups subject to cross-shareholding restrictions, additional regulations apply, such as bans on cross-shareholding, circular shareholding, restrictions on debt guarantees, and limitations on voting rights for financial and insurance companies.

Large-scale M&A was a decisive factor in shifting business group rankings. Woongjin re-entered the list of public disclosure business groups after acquiring the funeral service company Preed Life, while Kyobo Life Insurance was upgraded to the group subject to cross-shareholding restrictions (rising from 47th to 42nd place) after its acquisition of SBI Savings Bank, which raised its assets above KRW 12 trillion. In addition, Taekwang (rising from 59th to 48th), which acquired Aekyung Industrial, and Sono International (from 64th to 52nd), which acquired T’way Air, both scaled up through M&A and saw significant rank increases.

External economic uncertainties and geopolitical tensions also affected the rankings. Heesung and Iljin Global were newly designated, driven by rising exchange rates and precious metal prices. Demand growth in the defense industry led to rank increases for major defense business groups, including Hanwha (from 7th to 5th), Korea Aerospace Industries (from 62nd to 53rd), and LIG (from 69th to 63rd).

On the other hand, Youngone, which was a public disclosure business group last year, was excluded from the designation as its total assets fell below KRW 5 trillion. E-Land was downgraded from a business group subject to cross-shareholding restrictions to a public disclosure business group due to failing to meet the asset threshold.

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