Mergers & Acquisition Arbitration Matters under Korean Law at the KCAB

Mergers & Acquisitions (M&A) lead to disputes around the world, many of which are complex and involve money that may change substantially the future of a company, shareholders, employees and other stakeholders. Korea is no different in this respect. Korea witnessed the number of its cross-border transaction disputes explode during the 1997 IMF crisis and continue to steadily increase ever since. Many of these issues ended in arbitration and many others lead to criminal charges and into the Korean courts. While there are no readily available published statistics on the number of M&A transactions relating to Korea that led to arbitration , market trends show that the number of disputes have grown in relation to the overall growth of the M&A market. This article shall discuss the frequency of M&A disputes in Korea, the most common M&A issues arbitrated in Korea, as well as the procedural norms for damages and

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Korean Merger Control and the Korean FTC

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

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Statutes & Regulations Governing Business Combinations in Korea: Korean Mergers & Acquisitions Basics

Most business combinations in Korea take the form of share transfer, asset transfer or a share subscription. All the typical forms of combinations, in Korea, including business transfers, cash-out mergers, triangular mergers, spin-offs, and the like are available in Korea under the Korean Commercial Code. However, the difficulty in getting a deal done in Korea is, often, frustrated, because of bureaucratic uncertainty and the varying laws that govern transactions. You will find, though, that most of the least political sensitive acquisitions in Korea can be accomplished cost-effectively and efficiently with proactive counsel in Korea. The present Park administration is, attempting, to reduce some burdens on foreign investors, however, numerous political obstacles are in place, because of the present political dynamics.  We don’t expect any changes in Korean Law in the near future with regard to M & As, however, we will update the reader if changes occur. This is not

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