Most Popular
-
6
Chaos unfolds as rare November snowstorm grips Korea for 2nd day
-
7
BOK makes surprise 2nd rate cut to boost growth
-
8
‘VCHA, Katseye and Dear Alice are not K-pop groups,’ industry experts say
-
9
11 injured in 53-car pileup on icy road in Wonju
-
10
[Graphic News] South Koreans favor Japan for repeat overseas trips
![[Graphic News] South Koreans favor Japan for repeat overseas trips](//res.heraldm.com/phpwas/restmb_idxmake.php?idx=644&simg=/content/image/2024/11/27/20241127050101_0.gif&u=)
![[Graphic News] South Koreans favor Japan for repeat overseas trips](http://res.heraldm.com/phpwas/restmb_idxmake.php?idx=644&simg=/content/image/2024/11/27/20241127050101_0.gif&u=)
A prolonged economic slump is forcing a slew of business groups here to sell their affiliates to tide over cash shortages and shore up their financial status, industry sources said Monday.
High-profile deals currently under way include the sales of Dongbu HiTek Co. and Dongbu Metal Co. Dongbu Group said it plans to sell its stakes in the two firms by 2015, and also have its other affiliates sell assets to secure a combined 3 trillion won (US$2.82 billion).
LIG Group, a mid-sized business group, is also seeking to sell all of its shares in its nonlife insurance arm LIG Insurance Co., a deal valued at some 400 billion won, in a bid to secure cash to compensate investors for losses incurred from its 2011 financial fraud scandal.
Other firms with assets up for sale include Ssangyong Engineering & Construction Co. and Tongyang Securities Co.
"Financial authorities are prodding companies to improve their financial footing through asset sales, or companies are voluntarily slimming their size in order to tide over crisis," said an industry source.
Experts said that more firms will put assets on the selling blocks down the road as economic conditions are unlikely to improve sharply any time soon.
In the past few years, South Korea's mergers and acquisitions (M&As) market has grown sharply as companies have become aggressive buyers seeking to expand and diversify their businesses. Strategic investors such as major conglomerates had led the market for high-profile deals.
Last year, the number of mergers and acquisitions in South Korea spiked as the global economic slump and sluggish domestic demand pushed many companies to improve their business efficiency through business combinations.
A total of 543 corporate combinations were reported last year, up 26 percent or 112 cases from 2011, according to the Fair Trade Commission.
The increase is due to the global economic slowdown and weak domestic demand, which left many companies in search of ways to enhance their business efficiency.
The value of the reported M&As, however, dropped sharply. The M&As last year were valued at about 19.7 trillion won, down 35 percent or 10.6 trillion won from a year earlier, according to the corporate watchdog. (Yonhap News)
High-profile deals currently under way include the sales of Dongbu HiTek Co. and Dongbu Metal Co. Dongbu Group said it plans to sell its stakes in the two firms by 2015, and also have its other affiliates sell assets to secure a combined 3 trillion won (US$2.82 billion).
LIG Group, a mid-sized business group, is also seeking to sell all of its shares in its nonlife insurance arm LIG Insurance Co., a deal valued at some 400 billion won, in a bid to secure cash to compensate investors for losses incurred from its 2011 financial fraud scandal.
Other firms with assets up for sale include Ssangyong Engineering & Construction Co. and Tongyang Securities Co.
"Financial authorities are prodding companies to improve their financial footing through asset sales, or companies are voluntarily slimming their size in order to tide over crisis," said an industry source.
Experts said that more firms will put assets on the selling blocks down the road as economic conditions are unlikely to improve sharply any time soon.
In the past few years, South Korea's mergers and acquisitions (M&As) market has grown sharply as companies have become aggressive buyers seeking to expand and diversify their businesses. Strategic investors such as major conglomerates had led the market for high-profile deals.
Last year, the number of mergers and acquisitions in South Korea spiked as the global economic slump and sluggish domestic demand pushed many companies to improve their business efficiency through business combinations.
A total of 543 corporate combinations were reported last year, up 26 percent or 112 cases from 2011, according to the Fair Trade Commission.
The increase is due to the global economic slowdown and weak domestic demand, which left many companies in search of ways to enhance their business efficiency.
The value of the reported M&As, however, dropped sharply. The M&As last year were valued at about 19.7 trillion won, down 35 percent or 10.6 trillion won from a year earlier, according to the corporate watchdog. (Yonhap News)
