Are notification or review procedures required for business combinations?

It seems you are preparing for a business combination.

For business combinations between a company with assets or sales of 300 billion won or more and a company with assets or sales of 30 billion won or more, notification of business combination must be made to the Fair Trade Commission as a requirement (Article 18 of the Enforcement Decree of the Fair Trade Act).

In particular, large companies with total assets or sales of 2 trillion won or more are subject to prior approval for business combinations excluding interlocking directors, so caution is needed as business combination notification must be made before completing M&A.

Also, business combination review is conducted based on the Business Combination Review Standards (Fair Trade Commission Notification No. 2019-1), which determines the relevant market and examines whether the entity becomes a dominant business operator after the business combination, and reviews whether there are effects of blocking new entry or restricting competition.

In this process, if competition restriction is recognized, it will be denied or approved on condition of corrective measures, and conversely, if it is judged that there is no competition restriction, it will be approved as is.

Therefore, when promoting a business combination, it is important to check in advance whether the transaction falls under notification subjects, whether there are any issues in competition restriction evaluation during review, etc.