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M&A market boom to continue this year

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By Anna J. Park

The year 2021 logged the all-time record high of mergers and acquisitions (M&As) in the Korean market, with the transactional amount standing at some $181 billion in 3,423 M&A deals. According to Bloomberg data, it was a record amount, since the data was first compiled in 1998.

This year is expected to see the M&A boom continue in the local market as well. Various mega deals worth trillions of won are waiting in line to close this year in diverse sectors.

The first major deal of this year was marked by MBK Partners. The private equity firm completed the acquisition of a 100 percent stake in Dongjin Textile earlier this week, a month and a half since the two parties signed a sales and purchase agreement (SPA) in mid-November. Dongjin is a footwear textile supplier to global firms, including Nike and Adidas. The price for the acquisition is known to be about 780 billion won ($650 million).

Another private equity firm, VIG Partners, also signed a SPA deal early this week, in which it agreed to resell its 51.03 percent stake and the management rights to Star Vision to its original founder. Star Vision operates some 280 colored contact lens stores called "O-Lens." The firm also has the sunglasses brand "CARIN." Following the PE firm having acquired the stake in June 2018, it is expected to walk away with more than double its original investment.

Hanon Systems, a local auto parts supplier, is expected to be one of the major deals this year. Hahn & Co. acquired a 50.5 percent stake in the auto parts company in 2014 for 2.8 trillion won, and has been trying to sell it off since last year. It is estimated that the selling price could be as high as 8 trillion won. Various rumors swirled around the Hanon Systems deal throughout last year, yet nothing seems to have been confirmed since.

Hyundai LNG Shipping, currently owned by IMM Private Equity and IMM Investment, is also currently up for sale in the market, with a price tag of between 1.5 trillion won and 2 trillion won. The IMM consortium owns a 100 percent stake in the shipping company, having acquired the shipping company for some 1 trillion won in 2014.

ECO Management Korea (EMK) is considered another sale item by IMM Investment, with an estimated price tag of 1 trillion won. IMM Investment acquired EMK for 390 billion won from JPMorgan in 2017.

Burger King and Ministop Korea are also seeking new owners.

Affinity Equity Partners tapped Goldman Sachs recently as the sales manager for selling a 100 percent stake in Burger King Korea and Burger King Japan. Burger King Korea's price is estimated at around 600 billion won.

The acquisition of Ministop Korea, the country's fifth-largest convenience store brand, has drawn the interest of various PE companies as well as Emart24, the fourth-largest convenience store brand here.

The recent M&A market boom is not limited to Korea. The annual global M&A market size has reached its all-time high of over $5.6 trillion, way higher than the previous peak of 4.4 trillion won set in 2007, according to figures of Dealogic. The U.S. showed the highest year-on-year increase rate of nearly 100 percent last year, much higher than Europe's year-on-year increase rate of 47 percent or Asia's 37 percent.



Park Ji-won annajpark@koreatimes.co.kr


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