Sangsangin Securities has seen its stock price more than double over eight consecutive trading days, fueled by news of Shinhyup Bank's interest in acquiring the firm. However, the specifics of the acquisition and transaction terms have yet to be finalized.
As of 9:56 a.m. on the Korea Exchange, Sangsangin Securities shares were trading at 1,227 won, up 24 won (2.00%) from the previous day. Since July 30, the stock has surged nearly 110% over the eight-day rally.
On August 6, news broke that Shinhyup Bank was pursuing the acquisition of Sangsangin Securities, leading to the stock hitting its upper limit on both August 6 and 7.
According to investment banking sources, Shinhyup Bank signed a memorandum of understanding (MOU) with Sangsang Group last month regarding the acquisition. The two parties have reportedly established exclusive negotiation rights without seeking additional buyers until the third quarter.
Shinhyup Bank has selected Samil PwC and law firm Kim & Chang as advisors and is currently conducting due diligence on Sangsangin Securities. A stock purchase agreement (SPA) has not yet been signed, so the final transaction price and acquisition details will be determined after the due diligence process.
If the acquisition goes through, it will mark the first change in ownership of a securities firm since KCGI acquired Hanyang Securities last year. KCGI purchased a 29.59% stake in Hanyang Securities from Hanyang Academy for 220.3 billion won.
This transaction is notable as it involves a bank directly acquiring a securities firm, contrasting with the previous case of a private equity firm acquiring Hanyang Securities.
Shinhyup Bank has been expanding its non-banking operations, having acquired Trinity Asset Management from SK Securities last year and rebranding it as Shinhyup Asset Management. If the acquisition of Sangsangin Securities is successful, it will further broaden its portfolio of non-banking subsidiaries.
However, several procedural steps remain before the final transaction can be completed. As Shinhyup Bank is a special bank wholly owned by the National Federation of Fisheries Cooperatives, it must consult with the Ministry of Oceans and Fisheries regarding the acquisition. Additionally, to become the largest shareholder of Sangsangin Securities, it must obtain approval from the Financial Services Commission for the change in major shareholders.
Sangsangin Securities reportedly recorded a net profit of approximately 10 billion won in the first half of this year. After posting a net loss of about 50 billion won in 2024, it reduced its deficit to around 9 billion won last year and successfully returned to profitability this year.
The largest shareholder of Sangsangin Securities is Sangsangin, which holds a 55.85% stake. Including related parties, the largest shareholder's total stake is approximately 65%.
Meanwhile, Sangsangin Securities stated on August 6 that specific details regarding the acquisition are not yet finalized. The company noted, "Our largest shareholder, Sangsangin, is in discussions with Shinhyup Bank regarding the sale of our shares, but no concrete agreements have been established as of now. We will re-disclose any confirmed information or within one month."
* This article has been translated by AI.
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