The Monopoly Regulation & Fair Trade Act of Korea (Fair Trade Act of Korea) is the main regulation governing mergers and acquisitions in Korea. In the majority of cases , reporting and approval is not required for a target company with a yearly turnover of less than KRW 20 billion. The specific jurisdictional thresholds shall be addressed in a followup article. This article is intended to, simply, provide a list of the main Merger Control issues . A more substantive article shall follow.
The following types of transactions are required to be reported and approved, in most cases, by the Fair Trade Commission of Korea (“KFTC”).
- Purchase of 15% of the shares of a listed domestic company;
- Purchase of 20% of the shares of a non-listed company;
- Establishment of a joint venture or increasing shareholdings to meet the thresholds in 1 or 2 above;
- Merger with a company; or
- Purchase of all or most of the fixed assets of a target.
(Please don’t forget the jurisdictional threshold of KRW 20 billion. Thus, the majority of M & As in Korea are not required to report to the KFTC.
Korea, also, requires registration and approval, in most cases, when a director shall serve on the target company and the acquiring company’s board of directors.
Known for his proactive street-smart advice & non-conflicted advocacy, NY Attorney Sean Hayes works with leading retired Korean judges, prosecutors and experienced Korean attorneys in leading contentious and transactional matters in Asia. First non-Korean lawyer employed by the Korean Court System. SeanHayes@ipglegal.com
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