Korea’s chaebol reform a rare bonus for bankers

By:
Chris Wright
Published on:

With deal volumes weak across most of Asia, South Korea’s latest round of chaebol reform – some by choice, some by necessity – is welcome news for M&A bankers. There is plenty to do, but none of it simple, and not always lucrative.


 

IN ADDITION

South Korea’s chaebols are a throwback. Tangled and powerful, they date from the country’s efforts to bolster industrial growth in the aftermath of the civil war. Under tight family control and swept up on a wave of exporting success that has lasted on and off for half a century, they are everywhere. And they are also out-of-date, stifling growth and entrepreneurship, where once they drove it.

The idea of reforming these huge conglomerates is nothing new. LG, controlled by the Koo family, was the first of the biggest chaebol to start dismantling its labyrinthine circular shareholdings and move to a holding company structure in the early years of this century; it was followed by SK a few years later. Now there is a renewed round of activity driven by two different causes. 

At the top end, Samsung – the biggest and...