Fair Trade Commission in Sejong City. [Photo by Yu Dae-gil]
The number of holding companies decreased by four last year, totaling 173, according to the Fair Trade Commission. Additionally, venture investments by corporate venture capital (CVC) firms associated with general holding companies fell to 193.9 billion won, a decline compared to the previous year.
On June 24, the Fair Trade Commission released data on the status of holding companies and CVCs under the 'Monopoly Regulation and Fair Trade Act.'
As of the end of December last year, the number of holding companies stood at 173, down from 177 the previous year. However, the overall trend shows an increase in the number of holding companies, with figures of 164 in 2020, 168 in 2021, 174 in 2023, and 177 in 2024.
Among the publicly disclosed business groups, the number of groups with holding companies rose by one to 51, compared to 50 the previous year. A conversion group is defined as a business group where the total assets of the holding company and its subsidiaries exceed half of the total assets of the entire group.
Specifically, Daemyung Chemical, Kolmar Korea, Orion, and Heesung were designated as large business groups with holding companies. Samsung Biologics' biosimilar division was spun off to establish a new holding company, Samsung Epise Holdings. Conversely, Shinsegae's holding company, Emerald SPV, was merged into E-Mart and ceased to exist, while Forever was excluded from the large business group.
As of the end of last year, the average total assets of holding companies reached 31.754 trillion won, an increase of 1.589 trillion won from the previous year's 30.675 trillion won. The average debt ratio decreased by 4.4 percentage points to 39.3%, down from 43.7% the previous year.
The total number of subsidiaries under all holding companies was 2,357, indicating an average of 13.9 subsidiaries per holding company. The average ownership stakes in subsidiaries and their subsidiaries were 73.7% (42.0% for listed companies and 87.0% for unlisted) and 84.5% (46.1% for listed and 86.8% for unlisted), respectively.
The Fair Trade Commission also disclosed the status of CVCs under general holding companies. Last year, the number of CVCs decreased by one to 13, down from 14 the previous year, largely due to Doosan's exclusion from the holding company structure. Among the 13 CVCs, 10 (76.9%) were newly established since the introduction of the CVC system.
The 13 CVCs managed a total of 85 investment funds, an increase of 15 from the previous year. The committed amount for these funds reached 394.5 billion won, up 61.5 billion won from 333 billion won the previous year. The average committed amount for the 15 newly established funds was 26.3 billion won, which is 64.4% higher than the average of 16 billion won for funds established by South Korean venture capital firms.
In terms of investment activity, the 13 CVCs executed 151 venture investments totaling 193.9 billion won. While this represents a decrease from 245.1 billion won the previous year, it is an increase compared to 176.4 billion won in 2023. The Fair Trade Commission views venture investments through CVCs as steady.
The distribution of investment by the age of target companies shows an increasing focus on early-stage and mid-sized companies. Investment in early-stage companies remained at 27.1 billion won, but their share of total investments rose to 14.0%, up from 11.1% the previous year. Investment in mid-sized companies totaled 77.7 billion won, accounting for 40.1%, which is an increase of 22 billion won and 9.3 percentage points from the previous year.
A Fair Trade Commission official stated, "In the second half of this year, we will disclose the ownership and investment structures of large business groups and their internal transaction statuses to encourage voluntary improvements in their behaviors. We plan to develop a 'business group soundness evaluation index' that will provide a comprehensive view of the soundness of ownership, governance, and transaction structures, ensuring that more substantial information is supplied to the market and stakeholders."
Meanwhile, there are expectations that the presence of CVCs will grow as the Yoon Suk Yeol administration focuses on revitalizing productive finance. The Fair Trade Commission previously announced in November that it would improve the CVC system for general holding companies to promote venture investments.
On June 24, the Fair Trade Commission released data on the status of holding companies and CVCs under the 'Monopoly Regulation and Fair Trade Act.'
As of the end of December last year, the number of holding companies stood at 173, down from 177 the previous year. However, the overall trend shows an increase in the number of holding companies, with figures of 164 in 2020, 168 in 2021, 174 in 2023, and 177 in 2024.
Among the publicly disclosed business groups, the number of groups with holding companies rose by one to 51, compared to 50 the previous year. A conversion group is defined as a business group where the total assets of the holding company and its subsidiaries exceed half of the total assets of the entire group.
Specifically, Daemyung Chemical, Kolmar Korea, Orion, and Heesung were designated as large business groups with holding companies. Samsung Biologics' biosimilar division was spun off to establish a new holding company, Samsung Epise Holdings. Conversely, Shinsegae's holding company, Emerald SPV, was merged into E-Mart and ceased to exist, while Forever was excluded from the large business group.
As of the end of last year, the average total assets of holding companies reached 31.754 trillion won, an increase of 1.589 trillion won from the previous year's 30.675 trillion won. The average debt ratio decreased by 4.4 percentage points to 39.3%, down from 43.7% the previous year.
The total number of subsidiaries under all holding companies was 2,357, indicating an average of 13.9 subsidiaries per holding company. The average ownership stakes in subsidiaries and their subsidiaries were 73.7% (42.0% for listed companies and 87.0% for unlisted) and 84.5% (46.1% for listed and 86.8% for unlisted), respectively.
The Fair Trade Commission also disclosed the status of CVCs under general holding companies. Last year, the number of CVCs decreased by one to 13, down from 14 the previous year, largely due to Doosan's exclusion from the holding company structure. Among the 13 CVCs, 10 (76.9%) were newly established since the introduction of the CVC system.
The 13 CVCs managed a total of 85 investment funds, an increase of 15 from the previous year. The committed amount for these funds reached 394.5 billion won, up 61.5 billion won from 333 billion won the previous year. The average committed amount for the 15 newly established funds was 26.3 billion won, which is 64.4% higher than the average of 16 billion won for funds established by South Korean venture capital firms.
In terms of investment activity, the 13 CVCs executed 151 venture investments totaling 193.9 billion won. While this represents a decrease from 245.1 billion won the previous year, it is an increase compared to 176.4 billion won in 2023. The Fair Trade Commission views venture investments through CVCs as steady.
The distribution of investment by the age of target companies shows an increasing focus on early-stage and mid-sized companies. Investment in early-stage companies remained at 27.1 billion won, but their share of total investments rose to 14.0%, up from 11.1% the previous year. Investment in mid-sized companies totaled 77.7 billion won, accounting for 40.1%, which is an increase of 22 billion won and 9.3 percentage points from the previous year.
A Fair Trade Commission official stated, "In the second half of this year, we will disclose the ownership and investment structures of large business groups and their internal transaction statuses to encourage voluntary improvements in their behaviors. We plan to develop a 'business group soundness evaluation index' that will provide a comprehensive view of the soundness of ownership, governance, and transaction structures, ensuring that more substantial information is supplied to the market and stakeholders."
Meanwhile, there are expectations that the presence of CVCs will grow as the Yoon Suk Yeol administration focuses on revitalizing productive finance. The Fair Trade Commission previously announced in November that it would improve the CVC system for general holding companies to promote venture investments.
* This article has been translated by AI.
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