Corporate Group Downsizing Most Active in 5 Years... Hanjin Increased by 8 Units

148 Companies Excluded from Large Business Groups in Three Months
Highest Number Ever Recorded

It was found that the number of companies belonging to large business groups decreased by 148 in the past three months. During this period, Taeyoung, Daishin Securities, and SK were the most active in downsizing to improve financial structure and reorganize their businesses, while Hanjin significantly expanded its size by incorporating Asiana Airlines and others into its affiliates through corporate merger approval.

On the 10th, the Fair Trade Commission announced the status of changes in companies belonging to large business groups from November to January. The total number of companies belonging to 88 large business groups was 3,205, down 79 from 3,284 at the end of October last year.

Through company establishment and equity acquisition, 69 companies were incorporated into affiliates in 38 groups. The groups with the most newly incorporated companies were Hanjin (8), Hanwha (4), KT, MDM, and Joongang (3 each) in order.

Companies excluded from affiliates due to mergers and acquisitions, equity sales, and liquidation termination totaled 148 companies in 44 groups. This is the highest number since the disclosure of changes in companies belonging to large business groups began every three months in 2018.

The business group with the most excluded companies was Taeyoung. To improve financial structure and enhance management efficiency, Taeyoung excluded a total of 30 companies from its affiliates, including selling shares of the waste treatment company Ecobit and merging its subsidiary Blue One Leisure.

SK also excluded a total of 13 companies from its affiliates by absorbing SK E&S and selling shares of ISCM as part of its business reorganization. In addition, Hanwha, Kakao, and DL companies also engaged in downsizing through mergers and acquisitions or equity sales.

In the logistics and transportation sector, equity acquisitions and company establishments to expand business capabilities were actively carried out. Hanjin incorporated three airlines, including Asiana Airlines, whose corporate merger was finally approved last year, and Sono International incorporated JC Aviation No.1, which holds shares in the low-cost carrier Air Premia.

Kumho Asiana established Kumho Mokpo City Bus related to city bus operations, and Joongang established DeliBox Joongang related to logistics and delivery. Eugene acquired shares of Alliance, related to home appliance and furniture installation and delivery, and incorporated it into its affiliates.

Company establishments and equity acquisitions for business diversification were also active in various fields such as energy, healthcare, and materials business. LS acquired shares of Yeosu Green Energy related to LNG power generation and established Incheon Clean Energy Hub related to hydrogen supply business. Kyobo Life Insurance established Kyobo Dasom Care. BGF acquired shares of Daewon K-Cal.