More and more listed companies in Korea are going for mergers for the purpose of business restructuring and reorganization. Mergers are increasingly considered as a new growth strategy for many of them nowadays.
Meanwhile, spin-offs for business expansion and diversification are becoming less frequent than before. Not a few industry experts are pointing out that mergers or spin-offs are no silver bullets, because at least some time is required until such activities lead to a tangible synergy and business improvement.
According to the Financial Supervisory Services, a total of 25 companies have made an announcement of a merger since this year, 18 of which are listed on the KOSPI and the rest on the KOSDAQ.
The most remarkable trend for this year is the acquisition of subsidiaries and affiliated companies in the same group. For example, Korea Integrated Freight Terminal of the CJ Group is planning to take over Jungbu Integrated Freight Terminal next month. The group decided to do so in order to enjoy some advantages by means of a merger between the two firms whose business scopes overlap.
In the meantime, the number of corporate spin-offs has been relatively limited this year, to eight to be exact.