[Market Focus] CJ Surges Over 9% on News of Olive Young Merger Initiation

On September 5, CJ showed strong gains in early trading. This comes as news broke that CJ has officially begun the merger process with CJ Olive Young.

As of 9:41 a.m. on this day, CJ was trading at 182,000 won, up 16,500 won (9.97%) from the previous trading day.

The surge appears to be driven by reports that CJ has started the merger process with CJ Olive Young. On this day, it was reported that CJ recently commissioned an accounting firm to conduct a valuation for the merger with CJ Olive Young.

Previously, Lee Sunho, former Head of Food Growth Promotion at CJ CheilJedang, moved to CJ on September 1 and took on the role of Head of Future Planning. This led to speculation that the merger between the holding company CJ and CJ Olive Young could signal the imminent succession of management to the fourth generation of the owner family.

In response, CJ has completely denied these claims. A CJ representative stated, "The article published by one media outlet about 'the start of calculating the merger ratio between CJ and Olive Young' is entirely untrue," adding, "CJ Group has never commissioned a valuation for a merger between the two companies, nor has it ever considered whether to proceed with a merger."

Meanwhile, CJ has drawn market attention due to the second amendment to the Commercial Act, which passed last month. The second amendment requires listed companies with assets over 2 trillion won to implement cumulative voting and expands the separate election of audit committee members from at least one to at least two.

As holding companies are the top controlling entities in large conglomerate groups, they have been seen as prioritizing the interests of major shareholders in corporate decision-making due to high ownership by the owner family, which has contributed to their undervaluation. As a result, the passage of the two rounds of Commercial Act amendments is expected by the securities industry to improve corporate governance.