M&A transactions grow 15% on year in 2020 with big deals in H2

The M&A transaction value in South Korea grew 15 percent on year in 2020 as the market quickly regained vitality from the Covid-19 financial turmoil in the earlier half.

The M&A deals made in the country last year amounted to 47.6 trillion won ($43.5 billion), up 15 percent from a year earlier, showed data compiled by the Korea M&A Exchange (KMX) on Wednesday. The number of M&A deals was counted at 720, 11 fewer than the previous year.

The M&A deals concentrated mostly in the second half of the year. There were 138 deals made in the first quarter and 148 deals in the second quarter as the market stayed dampened by the Covid-19 crisis. But the market quickly picked up, recording 190 deals in the third quarter and 244 deals in the fourth quarter.

“The M&A market contacted in the first half as geopolitical risks from Brexit, US-China trade dispute and Hong Kong protest elevated on top of the Covid-19 outbreaks, but the market began to recover in the latter half as fears from such uncertainties died down,” said a KMX official.

The software sector accounted for the largest share of M&A transactions last year with a total of 89 deals. Closely followed was the electronics components and chemicals sector. The construction and real estate sector that topped the 2019 M&A market with 81 deals had only 53 deals made last year. The service sector also marked a fall, from 78 deals to 52 deals, like the property market as the coronavirus dealt a heavy blow on them.

High-profile M&As were SK Hynix’s acquisition of NAND flash business from Intel and Doosan Group’s sale of its key units like Doosan Infracore and Doosan Solus under restructuring efforts.

By M&A deal type, stock trade accounted for the largest 42.5 percent, followed by merger with 36.9 percent and new share issues to the third party with 36.9 percent. The breakdown is about the same as the previous year.

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