Advance Notice of Amendment to Merger Notification Guidelines and Review Standards
Threshold Raised from 5 Billion KRW to Reflect Economic Scale Growth
In the future, the reporting of business transfer transactions will be mandatory if the transfer amount is 10% or more of the total assets of the transferor company or 10 billion KRW or more.
On the 17th, the Korea Fair Trade Commission announced that it has prepared amendments to the "Guidelines for Reporting Corporate Mergers" and the "Standards for Reviewing Corporate Mergers," and will hold an administrative notice period from today until July 8.
First, the obligation to report corporate mergers with little concern for competition restriction, such as the establishment of a PEF or holding less than one-third of the executives of another company concurrently (excluding cases where the representative is concurrently held), has been exempted.
In line with the increase in economic scale, the reporting threshold for business transfer has been raised to when the transfer amount is 10% or more of the total assets of the transferor company or 10 billion KRW or more.
Additionally, a new provision has been established allowing for prior consultation before reporting in cases of complex corporate mergers, and the principle of online reporting has been expanded. The current guidelines, which mandate online reporting only for simplified reporting corporate mergers, have been extended to all types of corporate mergers.
The Fair Trade Commission stated, "Once this administrative notice is implemented, the reporting burden on companies will be reduced, and the transparency and predictability of the reporting review will be enhanced." It added, "After reviewing the opinions of stakeholders and related ministries collected during the administrative notice period, the amendment will be finalized and implemented through procedures such as a plenary meeting resolution."
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