Acquisition Worth 216.7 Billion Won
Plans to Transform into a Major Securities Firm
KCGI has successfully completed a major merger and acquisition (M&A) after approximately 10 months by acquiring a 29.6% stake in Hanyang Securities.
On June 18, KCGI announced that it had completed the acquisition of 3,766,973 shares of Hanyang Securities, representing about 29.6% of the company, at 57,500 won per share, for a total of 216.7 billion won. This comes about 10 months after KCGI participated in the sale bidding process in August last year.
During the acquisition process, a tax audit began in March, causing a temporary suspension of the financial authorities' review of KCGI's eligibility as a major shareholder. However, after the tax audit concluded at the end of last month, the Financial Services Commission resumed its review. Subsequently, on June 11, the commission granted its final approval without issue.
Jung Taedu, a founding member and Chief Financial Officer (CFO) of KCGI, led the entire process, including contract negotiations with the Hanyang Foundation, securing investors, responding to the tax audit, and obtaining approval for the change of major shareholder.
KCGI successfully completed this transaction based on its extensive experience in financial institution M&As, including the privatization of Korea Land & Housing Trust and Woori Bank stakes, the acquisition of KT Capital and HK Savings Bank, and the successful acquisition of Meritz Asset Management in 2023.
KCGI stated that it plans to transform Hanyang Securities from a small-to-mid-sized securities firm into a large-scale securities company with over 1 trillion won in equity capital. The company aims to become one that satisfies shareholders, employees, and customers alike. KCGI will prioritize restructuring its business model and will actively expand into the retail bond market to strengthen its wealth management business and broaden its individual customer base.
For the new CEO, KCGI has appointed Kim Byungchul, known as the "Bond Guru" (former CEO of Shinhan Investment Corp. and current CEO of KCGI Asset Management). Under Kim's leadership, KCGI Asset Management's "KCGI Korea Fund" recorded an excess return of 23.5 percentage points over its benchmark last year, ranking first among equity funds.
Kang Seongbu, CEO of KCGI, is also a former top-ranked bond analyst and is expected to contribute to strengthening the company's bond management capabilities for its wealth management division.
To enhance the stability of its investment banking (IB) and asset management divisions, KCGI plans to introduce three core systems: a risk management system, a framework for identifying investment opportunities, and a performance-based compensation system (Amoeba Management).
To enhance shareholder value, KCGI will establish and operate an audit committee and implement a system in which all employees are evaluated fairly based on their performance, thereby establishing advanced governance. The company also plans to improve ROE and drive a market revaluation of Hanyang Securities through active shareholder returns and efficient capital management.
A KCGI representative stated, "We intend to inherit and further develop the long history and tradition of Hanyang Securities, and grow it into a securities firm that inspires dreams and hope among its members." The representative added, "We will do our utmost to guarantee job security for staff, while creating a model case for governance improvement and corporate value enhancement that satisfies shareholders, creditors, and customers alike."
The representative also said, "We will actively utilize artificial intelligence (AI) to respond proactively to changes in the financial environment and become a leader in financial innovation."
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