The interest in pursuing M&A as a growth strategy is increasing amongst Korean companies, as many seek new growth opportunities.
A survey of Korean executives conducted by Samsung Economic Research Institute (SERI) found 68% of 288 respondents planning M&As, however, up to now, M&A activity has not matched the recent interest.
Korea’s announced M&A volume is quite small in proportion to its economic size, with Korea ranked 32nd in the number of announced M&A deals and 38th in the number of M&As abroad, as of 2008, according to Korea Economic Research Institute.
According to the SERI survey results, the main reason that Korean companies have sealed fewer M&A deals is due to a lack of deal experience, conservative corporate culture, and management’s defensive attitude toward M&A deals rather than external factors.
Korean business executives’ negative perception, and defensive attitude towards M&As stems from bad memories of government-led restructuring M&As, hostile M&A attempts by hedge funds, and financial troubles after an acquisition (so called “winners curse”).
The full report “Lessons from Global Companies’ M&As” can be downloaded free of charge from the SERI Website, after registration.
(Source: SERI)
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