S Korea – FSC, FSS Shore Up M&A Disclosure

S Korea – FSC, FSS Shore Up M&A Disclosure

On 4 March 2024, SK FSC, SK FSS proposed revisions re corporate mergers.

  • SK FSC and SK FSS proposed revisions to Enforcement decree of capital markets act.
  • Also Regulations on issuance and disclosure of securities, to protect rights of general shareholders in the M&A process, improve global consistency of the merger system.
  • Follows February 2024 SK FSC, SK FSS issued measures to improve M&A.


  • Require the preparation of the board of directors’ written statement which contains information about the purpose of merger, its anticipated effect, merger price and ratio.
  • The written statement about M&As shall be disclosed as an attachment to the securities registration and material disclosure for that particular year.
  • Require external evaluation agencies to maintain quality management standards, which should address issues re the maintenance of autonomy, objectivity, fairness; conflicts of interest; confidentiality; actions to be taken for misconduct.
  • Prohibit an external evaluation agency offering third-party evaluation service to a company from getting involved in deciding a merger price for the same company.
  • For mergers between affiliated entities, require companies to obtain an approval from their audit committees for selecting an external evaluation agency to ensure fairness.
  • M&As between non-affiliated companies will no longer be subject to the merger price calculation method, in order to promote more market-driven restructuring.

Consultation Period

  • Comments shall be submitted by 15 April 2024 for planned effectiveness in Q3 2024.