SEOUL, February 20 (AJP) - Mergers and acquisitions among South Korea’s mid-sized companies are accelerating as firms face a prolonged economic downturn and high interest rates.
The number of M&A deals exceeding 100 billion won ($74.7 million) rose 12 percent to 474 cases in 2024.
Daemyung Sono Group, which operates 18 hotels and resorts, invested 176 billion won to acquire a 26.77 percent stake in budget carrier T’way Air and is now in negotiations to purchase an additional 30.06 percent stake from majority shareholder Yerimcorp.
Hanwha Hotels & Resorts recently signed an 870 billion won agreement to acquire a 58 percent stake in food service company Ourhome, while Woongjin Group secured preferential negotiation rights to acquire Premier Life, Korea’s largest funeral service provider, in a deal estimated at around 1 trillion won.
“While the M&A market has yet to fully recover from its downturn in the second half of 2022, mid-sized firms and subsidiaries of large conglomerates are emerging as key buyers as economic risks and interest rates become more predictable,” said Hong Seung-hwan, a partner at Samil PricewaterhouseCoopers.
Between 2021 and 2023, 51 percent of 807 M&A transactions involving large, mid-sized, and small companies occurred within related business sectors, according to data from the Ministry of SMEs and Startups.
Meanwhile, some firms are opting to divest assets. Hotel Lotte is considering selling its L7 and City Hotel properties, while Mohegan recently lost control of its Inspire Entertainment Resort to Bain Capital after failing to meet loan covenants.
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