By Lee Hyo-sik
Staff Reporter
Corporate merger and acquisition (M&A) here fell 25 percent in 2009, with companies refraining from advancing into new businesses or taking over rivals in the wake of the unprecedented worldwide economic downturn, the Fair Trade Commission (FTC) said Thursday.
The anti-trust agency said the number of applications for corporate mergers came to 413 last year, down 25 percent from 550 the previous year.
In particular, the number of cases in which foreigners acquired local firms reached 53, down 44 percent from 95 over the one-year period. Additionally, the number of M&A involving affiliates of large business groups holding over five trillion won in assets decreased 4.6 percent to 146 in 2009.
Despite a drop in the number of corporate mergers, the amount involved increased 5 percent to 150.3 trillion won from 142.8 trillion won a year earlier.
``Against the global economic slump, businesses here were reluctant to take over firms that are unrelated to their core operations. Instead, many integrated affiliates in a bid to cut costs and boost corporate efficiency. But this year, more corporations are expected to engage in M&As to expand their business portfolio in line with the ongoing economic recovery,'' a FTC official said.
The number of mergers involving unaffiliated firms reached 284, accounting for 69 percent of the total in 2009, down from 76 percent a year before, while M&A among affiliates accounted for 31 percent, up from 24 percent.
The largest M&A among affiliates was KT's absorption of KTF, followed by LG Telecom's merger with LG Dacom and LG Powercom, and Hyundai Mobis's acquisition of Hyundai Autonet.
By industry, financial, telecommunication and other service-oriented businesses accounted for 63 percent of total M&As, or 260 cases, while manufacturing sectors took the remaining 37 percent, or 153 cases.
POSCO and Lotte Group were the most active in taking over rivals and other unaffiliated firms, while Samsung Group, LG Group and KT were focusing on solar-powered cells, light emitting diodes (LED), software and other alternative growth fields, the FTC said.
The agency imposed 191 million won in fines in 20 separate cases last year for M&A report rule violations.