SOUTH KOREA

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Content last updated: 02-03-2020

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  • Merger Screening

1. What type of transactions are caught by the merger control regime?

1.1 Concentrations

1.1.1 Type of transactions that are caught by the merger control rules?

The following types of transactions are caught by the merger control rules:

a) acquisition of 20% or more of the total voting shares;

b) acquisition of additional shares by a shareholder already holding 20% or more of the total voting shares if by the transaction it becomes the largest shareholder;

c) participation as the largest shareholder in a new joint venture;

d) acquisition of all or a substantial part of the target’s business or fixed assets;

e) statutory merger with another company;

f) interlocking of management, i.e. a director or an employee of one company being registered as a director of another company (affiliates excluded).

2. Establishing jurisdiction for notification of mergers

2.3 General thresholds

2.3.1 Threshold(s) for when a concentration must be notified under the general merger control regime?

Merger filing is needed if one of the undertakings concerned had global assets or turnover of at least KRW 300,000,000,000 in the last financial year, and one of the other undertakings concerned had global assets or turnover of at least 30,000,000,000 in the last financial year.

In the case of foreign-to-foreign and Korean-to-foreign (but not foreign-to-Korean) transactions, filing is needed only if the following additional threshold is met:

  • Foreign-to-foreign mergers: The turnover in Korea of each of the at least two of the undertakings concerned was at least KRW 30,000,000,000 in the last financial year.
  • Korean-to-foreign: The turnover in Korea of the foreign target was at least KRW 30,000,000,000 in the last financial year.

2.4 Other national thresholds for ex ante merger control (e.g. sector-specific rules)

2.4.1 Relevant thresholds for sector-specific or other ex ante merger control rules?

Special rules apply for transactions in the telecommunications and financial industries.

2.5 Foreign-to-foreign mergers

2.5.1 Do any exemptions, special thresholds etc. apply to foreign-to-foreign mergers, i.e. where none of the undertakings concerned is domiciled in the jurisdiction?

See Section 2.3.1 above.

3. Calculation and allocation of turnover, asset value, transaction value etc.

3.3 Relevant undertakings for the calculation of turnover

3.3.2 The undertakings whose turnover is taken into account?

Turnover is calculated on a group level.

In asset deal, the seller’s affiliates are not included in the calculation of turnover.

3.5 Valuation and allocation of assets

3.5.1 The principles for valuation and allocation of assets?

Assets are calculated on a group level.

In asset deal, the seller’s affiliates are not included in the calculation of assets.

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and last updated on 02-03-2020 by

Legal Cross Border has itself provided all input about merger control in South Korea. This information has been gathered and validated by our in-house lawyers to guarantee the highest quality outcome. This said, we are currently looking for a local partner to cover Merger Control South Korea - please contact us if you would like to be our new partner.