Status of Affiliate Changes Among Large Business Groups Revealed by the Fair Trade Commission
12 Affiliates Added Over Three Months Due to Splits and Mergers
Active Inclusion of Companies Creating Synergy with Core Businesses
Cases of Affiliate E
Over the past three months, major conglomerates in South Korea have increased the number of affiliated companies by 12 through spin-offs and mergers.
On August 25, the Korea Fair Trade Commission announced that, between May and July of this year, 52 out of 92 large business groups experienced changes in their affiliated companies. The total number of affiliated companies decreased from 3,301 to 3,289, a net decrease of 12 companies.
Through company establishments (29 cases) and equity acquisitions (14 cases), 61 companies were newly incorporated into 34 business groups. Meanwhile, due to mergers (13 cases), equity sales (11 cases), and liquidations (19 cases), 73 companies were excluded from 36 business groups.
The groups with the highest number of newly incorporated affiliates were Krafton (10 companies), Naver (4 companies), and Hanwha, Taekwang, and Sono International (3 companies each). The groups with the most exclusions were Daekwang (20 companies), Youngone (5 companies), and SK (4 companies).
The Korea Fair Trade Commission stated, "The main characteristic of these recent changes in affiliated companies is the active incorporation of companies that can create synergies with existing core businesses, rather than pursuing entirely new business ventures."
LG incorporated Bear Robotics Korea, an AI-based robotics development company, into its group to create synergy with its existing robotics business. Hanwha acquired a stake in Ourhome, a food distribution and catering company, to generate synergy with its existing distribution and food service businesses, thereby incorporating it into the group.
Naver incorporated Asil, a real estate platform company, to create synergy with its existing businesses. Krafton incorporated 10 companies, including Neptune, an ad-tech and game development company. Sono International incorporated three companies, including the airline T'way Air, into its group.
There were also cases of exclusion from business groups due to mergers and equity sales aimed at improving management efficiency and financial structure.
SK enhanced management efficiency in the semiconductor inspection sector by having ISC merge its subsidiary ITMTC, resulting in its exclusion from the group. POSCO, aiming to strengthen its competitiveness in the LNG business, had POSCO International merge its subsidiary NEAH, also resulting in exclusion from the group.
Additionally, for reasons such as improving management efficiency and financial structure, Kakao sold its stake in Next Level Studio, a webtoon production company, and Naver sold its stake in Studio Four Leaf, a game development company, leading to their exclusion from the respective groups.
There were also cases of exclusion from business groups involving companies controlled by relatives or executives of the controlling shareholder, particularly in newly designated groups.
This year, Daekwang, newly designated as a business group, excluded 20 companies such as Myungseong Industry, which were controlled by executives of its affiliates, due to resignations and liquidations. Bithumb excluded Mate, a company controlled by relatives, and Youngone excluded five companies, including TOM, controlled by relatives and executives, for reasons such as executive resignations and liquidation. Sono International excluded three companies, including D Media, by recognizing independent management by relatives.
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