이 기사는 2020년 04월 02일 08:00 thebell 에 표출된 기사입니다.

South Korean M&A activity remained stable year-on-year during the first three months of 2020 based on closed deals. But the value of announced deals dropped significantly, as the impact of the spread of COVID-19 on the global financial markets puts a damper on M&A dealmaking.

The total value of deals relating to acquisitions and sales of companies was 14.57 trillion won for the first quarter with the number of transactions totaling 89, which remained steady compared to the same period last year, according to the bell’s league tables compiled based on deals that have completed.

However, the value of announced transactions was slashed in half, falling to 5.23 trillion won from 10.6 trillion won in the first quarter of 2019. This also marked a significant drop from 7.3 trillion won and 8.8 trillion won in the same period of 2018 and 2017, respectively, a sign that dealmaking has been slowed as the fallout of the ongoing coronavirus pandemic has caused market participants to back away from deals.

Several major deals signed in the first quarter include SK Networks’ 1.3 trillion won sale of its gas station business, Hahn & Company’s 382.5 billion won acquisition of SK Chemical’s biofuel business and Anchor Equity Partners’ 210 billion won equity investment in Kakao M.

The total deal activity – which also includes mergers, joint venture transactions and acquisitions of real estate – for the first quarter was 31.62 trillion won, of which PE-backed transactions accounted for nearly 25 percent, totaling 7.78 trillion won.

PE deals are concentrated in acquisitions and sales of companies, accounting for about 51 percent, or 7.3 trillion won, of the total value of such transactions that closed in the first quarter.

This is consistent with trends over the past three years, indicating that PE firms armed with a record amount of cash have continued to dominate the M&A market. The share of PE-backed deals accounted for 43 percent in 2017, 67 percent in 2018 and 52 percent in 2019.

The largest PE deal of the first quarter was Macquarie PE’s acquisition of Daesung Industrial Gases, which completed in February. That was a secondary deal where Macquarie PE bought the company from MBK Partners for 2.5 trillion won. KKR’s 1.2 trillion won sale of KCF Technologies to SK Group was also one of the major PE transactions that closed in the first quarter.

Other notable PE deals in the first quarter include IMM Private Equity’s 730 billion won sale of Tailim Packaging and Tailim Paper to Sae-a Trading; Glenwood Private Equity’s 600 billion won acquisition of SKC Kolon PI; and TPG’s 280 billion won acquisition of Health Balance from Anchor Equity Partners.

Among them, the bidding race for SKC Kolon PI drew attention as it was also joined by other major homegrown PE firms, including MBK Partners and Hahn & Co. But Glenwood PE, which outpaced rivals with its proposal on the long-term growth plan for the company, ended up being the new owner of the polyimide film maker.

Netmarble’s acquisition of Woongjin Coway, which completed in February, was one of the largest transactions among non PE deals. Netmarble bought the water purifier rental company for 1.74 trillion won from Woonjin Group – which put it up for sale just three months after repurchasing it from MBK Partners due to the group’s liquidity issues – in a surprise deal announced at the end of last year.

Daelim Industrial’s 618 billion won takeover of Carliflex, the chemical business unit of U.S.-based Kraton, is also one of the notable strategic M&A deals that closed in the first quarter. This marked Daelim Industrial’s first outbound acquisition, which was part of the company’s efforts to secure new growth engines.

Morgan Stanley topped the M&A financial advisory league tables in the first quarter. The second position was taken by Credit Suisse, though it came in first based on data on announced deals, with fierce competition expected in the remaining period of the year.

In the first-quarter M&A accounting advisory league tables, Samil PwC secured the top position, closely followed by Samjong KPMG. Meanwhile, Kim & Chang retained the first spot in the M&A legal advisory league tables with more than 32 percent adjusted market share in the first quarter, followed by Lee & Ko, Yulchon and Shin & Kim.

(By reporter Han Hee-yeon)