Samsung Securities remained in the top spot in South Korea’s acquisition finance league table in 2020, according to thebell, narrowly beating off the challenge from Korea Development Bank (KDB) as competition became fiercer in the market.
Despite the impact of the Covid-19 pandemic, financial services firms in South Korea arranged 89 loans worth 21.02 trillion won ($19.34 billion) during the year. This was a similar level to 2019, when a total of 83 loans worth 22.31 trillion won were provided.
Samsung Securities arranged 11 loans with a value of 2.5 trillion won in the mergers and acquisitions (M&A) market, for an 11.9% share. Notably, the securities firm provided a loan of 633 billion won to Macquarie Korea Asset Management (MKAM) for its acquisition of Daesung Industrial Gases in February, and arranged a loan of 130 billion won to help finance the private equity firm’s purchase of LG CNS in April.
In October, Samsung Securities provided 195 billion won for a refinancing of ADT Caps, which was jointly acquired by SK Telecom and MKAM in 2018. It also arranged the refinancing of a 480 billion won loan for HK inno.N, which Kolmar Korea bought two years ago, provided a 189 billion won loan to back Viva Republica’s acquisition of LG Uplus’s online payment business, and arranged loans for the refinancing and recapitalization of Burger King and ServeOne, both owned by Affinity Equity Partners.
KDB arranged loans worth 2.33 trillion with an 11.1% market share in 2020, rising one spot to second after it had been placed a lowly 12th in 2018. The state-controlled bank is moving aggressively to strengthen its position in the market, with some of its rivals complaining about unfair competition due to its advantages as a policy bank.
KDB strengthens its market position
A loan of 600 billion won for SK Engineering & Construction’s takeover of EMC Holdings was among the largest deals arranged by KDB last year, together with loans for Sae-A Trading’s acquisition of Tailim Packaging, Glenwood Private Equity’s purchase of SKC Kolon PI, IS Dongseo’s takeover of Koentec and the refinancing of Halla Cement, which was acquired by Asia Cement in 2018.
Mirae Asset Daewoo slid two spots to third in 2020 with loans worth 2.15 trillion won and a 10.3% market share. The largest was a 955 billion won loan provided for the recapitalization of Ssangyoung Cement Industry, which is owned by Hahn & Co. Mirae Asset Daewoo arranged a large portion of its loans for private equity clients, including MKAM, MBK Partners, Hahn & Co, Morgan Stanley Private Equity and Baring Private Equity Asia (BPEA).
In fourth place was Korea Investment & Securities, arranging loans worth 1.95 trillion won for a 9.3% market share, including a 650 billion won loan for recapitalization of Doosan Machine Tools, which is owned by MBK Partners. Loans arranged by the firm in the M&A market included those for MKAM’s acquisition of LG CNS, BPEA’s equity investment in Shinhan Financial Group and the refinancing of ADT Caps.
KB Securities came fifth with 1.92 trillion won in loans and a 9.2% market share, with its activity concentrated in the second half of 2020. Among the largest loans provided were those for the refinancing of ADT Caps and the recapitalization of ServeOne. (Reporting by Hee-yeon Han)