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1. Overview
The Korea Fair Trade Commission (hereinafter the “KFTC”) analyzed and announced its 2019 merger review trends.

※ The analysis reflects only transactions subject to notification obligation under the Monopoly Regulation and Fair Trade Act (MRFTA), thus reviewed by the KFTC.

The total number of business combinations notified to the KFTC in 2019 reached 766 which was up by 64 from a year ago. The total transaction value was KRW 448.4 trillion (USD 377 billion) in 2019, which was down by KRW 38.2 trillion (USD 32 billion) compared to 2018.

* In cases where notifying parties are Korean firms (number/transaction value) : 570 cases / KRW 43.6 trillion (2018) → 598 cases / KRW 30.0 trillion (2019)
* In cases where notifying parties are foreign companies (number/transaction value) : 132 cases / KRW 443.0 trillion (2018) → 168 cases / KRW 418.4 trillion (2019)

2. Merger trends in 2019

A. Business combinations by means
When classifying business combinations in 2019 by means, business combinations in the form of acquisition of stocks recorded the highest number (251 cases, 32.8%) followed by the establishment of a new company (214 cases, 27.9%), mergers (152 cases, 19.8%), acquisition of business (81 cases, 10.6%), and concurrent holding of an executive position (68 cases, 8.9%).

Compared to 2018, the number of business combinations in the form of establishment of a new company (23.4→27.9%) and acquisition of stocks (32.2%→32.8%) increased, while the number of transactions in the form of mergers (23.4%→19.8%), concurrent holding of an executive position (10.0%→8.9%), and acquisition of business (11.0%→10.6%) decreased.

B. Business combinations by type
When classifying business combinations in 2019 by type, business combinations in the type of conglomerate mergers (444 cases, 58.0%) recorded the highest number, followed by horizontal mergers (258 cases, 33.7%) and vertical mergers (64 cases, 8.4%).

When categorizing business combinations in 2018 by type, the result is similar to that of 2019 (conglomerate > horizontal > vertical). However, the percentages of horizontal (30.3%→33.7%) and conglomerate (55.0%→58.0%) mergers increased while the percentage of vertical mergers (14.7%→8.4%) decreased in 2019 from a year earlier.

C. Business combinations by sector
When analyzing business combinations in 2019 by sector (based on the businesses of target companies), the number of business combinations involving the manufacturing industry posted 259 out of 766 in total (33.8%), and the number of transactions involving the services sector recorded 507 (66.2%).

Compared to 2018, the number of business combinations involving the manufacturing industry increased (255→259) but the percentage the industry accounts for decreased (36.3%→33.8%) in 2019. Both the number and percentage of business combinations involving the services sector increased in 2019 from the previous year (447 cases→507 cases, 63.7%→66.2%).