[K-INVESTORS] "Korean Companies' Interest in Overseas M&A Surges"... Kwak Yungu, Samil PwC Partner

Samil PwC Embraces Cross-Border Deals, Abandons 'Pure-Blood' Policy
Actively Recruiting Global IB Experts
Partner Kwak Advises on Hyundai Motor's Boston Dynamics Acquisition
Robotics, AI, Semiconductors Among Promising Investment Sectors

Editor's NoteThe Korean capital market is more turbulent than ever, driven by greed and selfishness. Manipulations and foul play are rampant. However, many investors have carved out their own investment worlds and emerged as role models for individual investors, having endured numerous crises from the foreign exchange crisis, dot-com bubble, global financial crisis, to COVID-19. Through meetings with these investors, we aim to convey the value of money through their war-like stories of the capital market, their philosophies, failures, and successes. Starting now, we bring you stories from various experts, including the chief investment officers of domestic pension funds who have become global 'big players' through value investing and activism, leaders of private equity funds and asset management firms, and CEOs of financial companies.

"Domestic companies have little interest in the domestic market. From large corporations to mid-sized companies, all are turning their eyes overseas."

Yungu Kwak, Partner of the Deal Division at Samil PwC, recently explained the trends in the mergers and acquisitions (M&A) market in an interview with Asia Economy. He said, "While expansion into Southeast Asia, such as Vietnam and India, remains active, recently there has been a growing need to establish bases in the U.S. due to tariff concerns stemming from the Trump administration," adding, "As advisors, we are responding by helping to find suitable local companies."

Partner Kwak is a veteran M&A advisor with 23 years of experience. After graduating from Seoul National University with a degree in Business Administration, he worked in Samsung C&T's finance team and the investment consulting firm Arthur Andersen GCF before joining Samil PwC, where he fully engaged in this field. At that time, Samil PwC, which insisted on hiring only public recruitment accountants, rarely hired outsiders or non-accountants.

Samil PwC Group Leader Kwak Yoon-gu is being interviewed by Asia Economy at the Samil Accounting Corporation office in Yongsan-gu, Seoul. Photo by Jo Yong-jun

The recent increase in cross-border deals has brought significant changes within Samil PwC as well. The firm has abandoned its 'pure-blood' policy and has been continuously recruiting cross-border experts from global investment banks (IBs) as partners. Partner Kwak explained, "The most important factor in cross-border deals is 'localization.' You must be able to speak the local language fluently and have access to local networks," adding, "In the past, companies preferred global IBs as advisors for cross-border deals, but to overcome this weakness, we plan to actively increase the number of external hires."

The scope of work is also expanding beyond acquisition and divestiture advisory. A representative example is playing a recruiting role to reduce difficulties arising from differences in corporate culture and work processes after M&A. Partner Kwak emphasized, "Companies struggle the most with PMI (post-merger integration) when acquiring overseas companies," and added, "We also provide services recommending candidates who have a balanced understanding of both cultures, accounting qualifications, and executive experience."

Partner Kwak has focused on large corporations and private equity fund (PEF) M&A throughout his career. His starting point was the 2016 sale of H-Line Shipping, a division of Hanjin Shipping. This deal attracted attention as the first domestic case of selling a dedicated shipping division of a large corporation to a PEF (Han & Company). The advisory team, including Partner Kwak, spent seven months obtaining approvals from numerous stakeholders such as creditors and cargo owners, successfully leading Hanjin Shipping's business restructuring and Han & Company's investment. He recalled, "It was an opportunity to realize that understanding and coordinating the needs of different transaction parties to create a win-win deal is the key to successful M&A advisory."

Samil PwC Group Leader Kwak Yoon-gu is being interviewed by Asia Economy at the Samil Accounting Corporation office in Yongsan-gu, Seoul. Photo by Jo Yong-jun

This experience laid the foundation for many subsequent large-scale deals. In particular, Partner Kwak successfully completed advisory for Hyundai Motor Group's acquisition of Boston Dynamics worth 1.136 trillion KRW in 2020. Boston Dynamics was a technology company in the R&D stage at the time, with no visible profit generation, making valuation challenging. A team of 20 to 30 people investigated similar cases and valued the company using various criteria. Partner Kwak evaluated, "This case became a benchmark within Samil PwC for valuing high-tech companies in the development stage."

In addition, Partner Kwak successfully led Hyundai Heavy Industries' acquisition of Doosan Infracore, the sale of Doosan Solus in 2020, the sale of Ssangyong Remicon in 2023, and the sale of Jeonju Paper in 2024.

Regarding industries to watch for future M&A and investment targets, he predicted, "Large corporations will focus on investing in future technology companies such as robotics and artificial intelligence (AI) domestically and internationally to quickly acquire core technologies." He also said, "Industries with high export ratios or high potential, where domestic companies can be competitive globally, will be spotlighted rather than domestic-oriented sectors like construction and building materials," specifically citing semiconductors, automobiles (mobility), and K-beauty, culture, and food.

Since July last year, Partner Kwak has been leading the newly established dedicated group for large corporation and PEF M&A within Samil PwC's Deal Division. He emphasized, "Our team will continue to grow and create more opportunities for juniors to become partners by continuously developing new clients and services."

Samil PwC Group Leader Kwak Yoon-gu is interviewing with Asia Economy at the Samil Accounting Corporation office in Yongsan-gu, Seoul. Photo by Jo Yong-jun