Is a reporting or review procedure required for a business combination?

It appears that you are preparing a business combination.

A business combination between a company with assets or revenue of 300 billion won or more and a company with assets or revenue of 30 billion won or more must necessarily be reported as a business combination to the Fair Trade Commission (Article 18 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act).

In particular, in the case of a large-scale company whose total assets or revenue is 2 trillion won or more, a business combination, excluding the concurrent holding of executive positions, is subject to prior approval, so caution is required in that a business combination report must necessarily be carried out before concluding an M&A.

In addition, the business combination review is conducted on the basis of the Business Combination Review Standards (Fair Trade Commission Notice No. 2019-1), and it determines the relevant market and examines whether the party will become a dominant business operator after the combination and whether there is any effect of blocking new entry or restricting competition.

In this process, if a restriction on competition is recognized, the combination is prohibited or approved on condition of corrective measures; conversely, if it is judged that there is no restriction on competition, it is permitted as is.

Therefore, when pursuing a business combination, it is important to check in advance whether the transaction is subject to reporting and whether there are any issues in the assessment of competition restriction during the review.