South Korean mergers and acquisitions (M&A) activity shrank year-on-year during the first half of 2020 based on closed deals.
The total value of deals relating to acquisitions and sales of companies was 23 trillion won ($19.1 billion) for the first half with the number of transactions totaling 169. This was a sharp drop compared to the same period last year, according to thebell’s league tables compiled based on deals that have completed.
The value of closed transactions was 26.7 trillion won in the first half of 2019 with a total of 178 transactions. The total value of deals decreased about 13% compared to the first half of 2019. This also marks a significant drop from 34.92 trillion won with 176 transactions compared to the same period of 2018.
There were only five big-ticket deals closed during the first half of 2020. The largest deal of this period was Macquarie Korea Opportunities Investment (Macquarie PE)’s acquisition of Daesung Industrial Gases, which was completed in February. It was a secondary deal where Macquarie PE bought the company from MBK Partners for 2.5 trillion won.
Netmarble’s acquisition of Woongjin Coway, which completed in February, was the second largest transaction. Netmarble bought the water purifier rental company for 1.74 trillion won from Woongjin Group in a surprise deal announced at the end of last year. The firm put Woongjin up for sale just three months after repurchasing it from MBK Partners due to the group’s liquidity issues.
Other notable deals in the first half include the 1.5 trillion-won merger of SK Broadband and t-broad and SK Networks’ sale of its gas station business to a consortium of Koramco and Hyundai Oilbank for 1.3 trillion won.
KKR’s 1.2 trillion-won sale of KCF Technologies to SK Group was also one of the major transactions that closed in the first half of this year.
Macquarie PE also purchased a 35% stake in LG CNS from LG Corp for approximately 950 billion won. Shinhan Financial Group acquired a 40.85% stake in Orange Life for 950 billion won and Mirae Asset Daewoo bought a 40% stake in Naver Financial for 800 billion won. IMM Private Equity’s 730 billion-won sale of Tailim Packaging and Tailim Paper to Sae-A Trading was also completed during the first six months of this year.
However, there was only one cross-border deal done during the first half of 2020. KB Kookmin Bank acquired Prasac Microfinance Institution, the largest microfinance deposit-taking institution in Cambodia, for 700 billion won to expand its Asian retail networks.
Morgan Stanley topped the M&A financial advisory league tables in the first half, working on five deals worth 2.5 trillion won. The second position was taken by Credit Suisse, although it came in first based on the number of deals.
Kim & Chang topped the M&A legal advisory league tables, working on most of big-ticket deals during the period, including Daesung Industrial Gases, Coway, KCFT and SK Networks deals.
In the M&A accounting advisory league tables, Samil PwC secured the top position, followed by Samjong KPMG. (Reporting by Hye-ran Kim)