Review of the possibility of corporate merger notification for stock acquisition of an investment partnership under the Civil Act

Law firm Veat received a request from Investment Combination A (hereinafter “Client”) to conduct a business combination filing related to the acquisition of shares of the investment combination.

According to the Civil Law, a combination is a non-corporate entity and, as a general rule, cannot be the subject of a combination filing.

However, there are specific situations where a combination under the Civil Law can be the subject of a business combination filing if an affiliated company that predominantly owns the combination acts as the filing company, and a thorough review of how to define and divide the relevant market was necessary.

The investor advisory team of Law firm Veat provided detailed legal advice based on its extensive investment legal advisory experience to ensure accurate filing and approval in accordance with the “Act on Regulation of Fair Trade and Advertising” (hereinafter “Fair Trade Act”) required when proceeding with a business combination through share acquisition.

Why an investment legal expert is needed in business combination

Business combination (M&A) is one of the growth strategies for companies to enhance competitiveness and increase market share, and it means the combination of companies where the independence of individual companies disappears and decision-making regarding business activities is integrated.

The Fair Trade Act classifies business combinations into 5 types (share acquisition, concurrent appointment of directors, merger, transfer of business, participation in company establishment).

The Fair Trade Commission requires companies with assets or sales of 300 billion won or more to mandatorily file a business combination if the filing company has assets or sales of 3,000 billion won or more, or the counterparty company has assets or sales of 300 billion won or more, in order to prevent business combinations that may create a monopoly.

Business combination filings can be classified into general and simplified filings, and the Fair Trade Commission comprehensively reviews market concentration, ease of entry, utility, and adjacent markets as merger types.

Filing a business combination can verify whether a merger is valid, and in this process, a merger may be impossible or delayed if a prohibition or corrective order is received. Therefore, it is important to discuss the relevant laws and judgments with a legal expert who well understands the business combination filing-related laws to prevent additional time and costs from being wasted by failing the filing or receiving a corrective order.

The specific filing method and procedure may vary depending on the type of business combination, and the investor advisory lawyers of Law firm Veat understand these complex procedures and content and support the Client to ensure that the business combination proceeds smoothly within a complex regulatory environment.

Law firm Veat demonstrates excellent expertise in the M&A sector, based on the performance of achieving 2nd place in the Bloomberg league table Q1 2023 in terms of the number of transactions, and shows itself as a leader in various M&A, including large-scale deals, medium-sized M&A deals, investment attraction for startups and venture capital (VC), and joint investments.

If you need help with business combination filings, establish a solid foundation through the legal services provided by the investor advisory lawyers of Law firm Veat.

Thank you.

Law firm Veat