IFLR 1000
The Guide to the World's Leading Financial Law Firms

The slowing South Korean mergers and acquisitions landscape is a concern to the country's financial institutions. This year saw several legislative changes aiming to facilitate transactions. However, as a partner at one prominent firm notes, "there are many M&A deals beginning, but their success rates are much lower than before".

According to the Korean Fair Trade Commission's (KFTC) 2011 report, 499 M&A reports were filed in 2010 from an all-time high of 857 in 2007. The only good news is that the number of M&A transactions has increased from its nadir of 413 in 2009.

Though these numbers may be skewed by changes in reporting requirements, it is of great concern that the lowest M&A rates are in the construction and manufacturing industries.

Korean financial institutions have made efforts to assist M&A transactions, most notably in March's revision of the Korean Commercial Code (KCC). The new KCC includes provisions for both 'squeeze-out' and 'cash-out' acquisitions. In 'squeeze-out' transactions, a controlling shareholder that owns 95% of a company can require the remaining 5% to sell their shares at a fair price.

One lawyer notes that the 'cash-out' transaction "is a good alternative to the squeeze-out acquisition". The buying company is now able to purchase all the shares of the acquired company in cash, ensuring that its shareholders have no control over the new organisation.

The introduction of special purpose acquisition companies (Spacs) in late 2010 has also helped M&A transactions. After Daeshin Securities Spac's successful acquisition of Ssuntel, the amount of Spacs mushroomed to about 20. Their presence will hopefully prop up South Korea's M&A market.

In an effort to spur competition, the KFTC also ramped up its fight against cartels, which it regards as a "grave offence that may undermine the backbone of market economic order" .It is actively pursuing several high-profile competition cases with enormous fines attached. The KFTC issued a $600 million fine, the highest ever fine for domestic cartels, against six domestic liquid petroleum gas suppliers for alleged price collusion over six years.

A practitioner notes: "The KFTC's commitment to disbanding and punishing cartels in the last year signals an increase in competition cases. Korean firms should be increasing their regulatory and competition abilities to prepare for more work involving both domestic and international cartels."

"[Bae Kim & Lee] has a wide range of lawyer profiles in terms of nationality and knowledge base," a client says. "Its expertise is very broad, with both regional and international legal counselling." Bae Kim & Lee is likewise highly regarded by peers because of its strong offering in the capital markets, competition, and M&A areas.

Peers note competition partner Keum Seok Oh for his expertise in international cartel cases. In a landmark decision, Oh led the defence of a group of luxury car dealerships in Korea, challenging a ruling by the Korean Fair Trade Commission. He successfully argued that price collusion is legal as long as it does not stifle competition.

Partners Dong Woo Seo, Sky Yang, and Kyu Sang Chung meanwhile advised Korea Exchange Bank and eight other financial institutions in a contentious M&A transaction involving the sale of a controlling stake of Hyundai Engineering and Construction. After fierce competition between Hyundai Motors Group and Hyundai Group, Hyundai Motors Group prevailed with a $4.5 billion offer.

In the capital markets area, clients rave about partner Eui-Jong Chung. One says: "He has sophisticated insight into Korean legal affairs as well as international legal issues. Also, he is committed to deals and very prudent in giving us legal opinions. As far as I know he is the best in the counselling business."

Bae Kim & Lee has been active in advising Chinese companies regarding IPOs on the Kosdaq. In July 2010, the firm handled toolmaker Wayport's W19.6 billion ($18 million) IPO. Following that listing, partners Hee-Gang Shin and Gi-Hyoung Oh acted for Shenglong PV-Tech Investment in its IPO, which raised W 50.4 billion.

Though peers generally regard Barun Law as a domestic law firm, clients appreciate it for its global perspective. ""For us, it's been extremely helpful that they have a lot of Korean lawyers who were educated at US law schools," an American client says, "They understand how Americans think, and their English fluency means there's no language barrier."

It is no surprise that their largest M&A transaction this year involved an American company. Partner Kitai Park and senior foreign attorney Thomas Pinansky assisted Thomas J Davis in a complex acquisition that spanned diverse jurisdictions, including 50% of a Texas joint venture, a company in Guam, a Philippines corporation, and a 40% stake in a Korean company.

Hwang Mok Park's M&A division continues to be led by highly respected managing partner Sang Il Park.

The most notable news this year is that the firm has closed its Shanghai office, acquired through a merger in 2009. This closure bucks the recent trend of Korean firms, most recently Shin & Kim, opening satellite offices in China.

Regardless, Hwang Mok Park continues to act for a diverse group of clients and was involved in a major Russian M&A transaction this year.

Though peers are ambivalent about Jipyong Jisung's performance this year, the firm was heavily involved in mid-sized transactions for a diverse international clientele. The firm, which changed its name from Jisung Horizon in December 2011, has offices in Ho Chi Minh City, Hanoi, Phnom Penh, and Vientiane. "Of all Korean firms, Jipyong Jisung have the strongest position in Southeast Asia," a client says.

The firm has leveraged its regional ties to complete several impressive transactions. Most notably, partners Haeng-Gyu Lee, Hee-Suk Chai and Eun-Young Lee represented Kolao Holdings in an IPO that raised W56.3 billion ($52 million). Kolao Holdings is reportedly the first Laotian company listed on Kospi (Korea Composite Stock Price Index). Haeng-Gyu Lee is also handling the first IPO of an Australian company on a Korean exchange, with the listing scheduled for the first quarter of 2012.

In April 2011, partners Seong Kang and Min Shin represented Daeshin Securities in their acquisition of Ssuntel, the first M&A transaction involving a special purpose acquisition company (Spac) since they were approved by the Financial Regulatory Commission in late 2009.

Kang, also head of Jipyong Jisung's competition practice, is a standout lawyer in Korea. A client comments: "His knowledge and expertise are first rate, and his ability to think outside of the box was invaluable."

Kim & Chang is an outstanding force in the domestic legal market and the largest firm in South Korea. Peers unanimously agree with its consistent and high-quality performance in competition, capital markets, and M&A. Due to its glowing reputation, Kim & Chang is almost always involved in the largest Korean cases.

In a landmark case, the firm represented the Korean National Oil Company (KNOC) in its £1.1 billion ($1.8 billion) hostile takeover of Dana Petroleum. Partner Myong Jae Chung and foreign attorney Chung Hoon Ahn handled the transaction, which was the first time a Korean corporation had successfully completed a hostile takeover of an overseas company. KNOC's acquisition of Dana Petroleum reflects a larger trend of Korean companies acquiring energy companies to reduce dependency on foreign oil.

Attorneys Chang Hyeon Ko, Woong Park, and Jong Hyun Park advised Samsung Life Insurance in offering 44.4 million shares owned by shareholders. The offering was completed in a timely fashion though there were complicated issues, such as the legal nature of a life insurance company. The IPO was altogether worth W22 trillion ($20.3 billion), the largest worldwide in the second quarter of 2010.

In the competition area, attorneys Chang-Sik Hwang, Sung-Eyup Park, Jay Hong Ahn, and Gene-Oh Kim successfully defended airlines such as Asiana Airlines, Singapore Airlines Cargo, All Nippon Airways, and Air France in the Korea Fair Trade Commission's investigation into airline cargo price fixing. The recommended fines were reduced by 90%, saving the airlines W120 billion ($111 million).

"You can't compare their network," a client says. "If any regulatory issue isn't solved by Kim & Chang, it just can't be solved. It's been like this since it was established in the early 70s. I think that their connections got even more phenomenal after the financial crisis in the late 90s."

Kim Chang & Lee, the oldest corporate firm in Korea, maintains a multi-faceted approach to legal management, with cultural facilities such as an art gallery on its premises. Managing partner Kyung-Joon Choi and foreign legal consultant Song-Il An maintain strong reputations in the M&A area.

Lee & Ko, traditionally a fixture for its strong banking practice area, is expanding its offerings and has experienced impressive growth in 2011. Though its capital markets and M&A practices added a handful of associates, its competition practice experienced the most development. The firm lured respected antitrust attorney Hwan Jeong and former Korean Fair Trade Commission lawyers Jung Won Park, Jung Hwan Lee and Hwan Won Noh, all from Shin & Kim.

Lee & Ko's commercial outlook impresses clients of all three practice areas. "I don't think they are necessarily innovative for the sake of being innovative; instead, they're solution-driven," a client says.

Peers compliment Lee & Ko's capital markets practice and frequently mention partner Wonkyu Han, the head of this area, as a noteworthy practitioner. Han advised Hana Financial Group on legal affairs regarding their issuance of 34 million new shares, worth W1.34 trillion ($1.19 billion).

Partner Sang Gon Kim meanwhile handled the merger of O Media Holdings, ON Media, CJ Media, CJ Internet, Mnet Media, and CJ Entertainment in a W1.1 trillion transaction, which closed in March 2011. This simultaneous merger comprised four publicly listed companies and two privately owned companies, resulting in complex regulatory issues.

In a high-stakes competition case, partners Yeong Seok Ahn, Sung Man Kim, and Hyun Chul Kim represented Posco, a Korean iron ore supplier, in the successful derailment of a W130 trillion joint venture between BHP Billiton and Rio Tinto, the second and third largest suppliers of iron ore in the world.

Peers have mixed reviews of Shin & Kim's performance this year: they speculate its traditionally strong capital markets area is deteriorating, and it lost four competition partners to Lee & Ko in April 2011. On the M&A front, however the firm is highly recommended by clients and peers.

Though peers question the firm's standing in capital markets, it won important mandates in the area of complex bond structuring and securitisation. Partners Ho-Seog Hwang and Young-Hee Jo led the first covered bond transaction in Asia, advising Korea Housing Finance on the issuance of $500 million of covered bonds. Jo also acted for Shinhan Card in a complex securitisation deal that involved entrusting credit card receivables to Citibank Korea to facilitate an interest rate and currency swap transaction.

"We had a very tight timeline and Shin & Kim were sensitive to that and were able to deliver the results well," comments a client. "They are knowledgeable regarding due diligence and strong in negotiation. They've been able to deliver work of exceptional quality in a very timely fashion."

Partners Chang-Hyun Song, Young-Hee Jo, and Byung-Tae Kim, advised KB Financial Group last year regarding the spin-off of Kookmin Bank's credit card business, now named KB Kookmin Card. The spin-off, which formed one of the largest credit card companies in Korea, was worth W2.4 trillion ($2.2 billion) in shareholders' equity and W12 trillion ($11.1 billion) in assets.

Though its competition department has lost personnel, Shin & Kim retains a well-regarded practitioner in Young Chul Yim. "Mr Yim is most likely the best anti-trust attorney in Korea at this moment," a client says. In a case pending appeal in the Seoul High Court, Yim is defending Qualcomm's business practices against the Korea Fair Trade Commission.

Yoon & Yang is ranked in the competition area for its frequent success in high-stakes, heavily-scrutinised cases. Much of its prestige can be attributed to managing partner Hoil Yoon, who peers recognise as one of the best competition lawyers in Korea.

The firm has not rested on its laurels, however, and has bolstered its practice with four important hires: Sue H Kim as a foreign attorney from the US Federal Trade Commission, Bureau of Competition; In Ok Son as a senior consultant from the Korea Fair Trade Commission; and Dae Hwi Kim, formerly the Chief Judge of the Seoul Family Court, as a partner.

Yoon is representing Cathay Pacific Airways and Air Hong Kong in a high-profile competition case pending appeal. The Korea Fair Trade Commission (KFTC) alleged that a 21-airline international air cargo cartel colluded on fuel surcharges and has consequently imposed a W120 billion fine ($110 million).

In a controversial competition case pending appeal, Partner Sung Bom Park is defending SK Gas and SK Energy against KFTC claims regarding a domestic liquid petroleum gas cartel. The KFTC claims that six domestic liquid petroleum gas suppliers colluded over a period of six years. The fine of W668.9 billion is the highest it has issued for an international cartel case.

Yoon & Yang is usually involved in mid-sized M&A transactions. Its most impressive transaction this year was led by Young-Su Shin, he advised Korean Development Bank regarding the establishment of a private equity fund that partnered with Korea National Pension Services to acquire 65.6% of Kumho Life Insurance for W480 billion.

"It [Yulchon] is more than just a typical law firm trying to charge out full rates," one client says. "We see the firm as more as a partner when we need legal counsel for deals." Peers attest to Yulchon's popularity, rating them highly in all three practice areas.

The firm has made several prestigious hires this year, luring M&A partner Tae Yong Ahn from Kim & Chang and adding partner Soo Jin Kang from the Korean Fair Trade Commission (KFTC). Sang Yong Park, the KFTC's former secretary general, has also joined the firm.

On the M&A front, Hee Woong Yoon, Tehyok Daniel Yi, Jaewon Lee and Kyu Sang Hwang advised Honam Petroleum in its acquisition of 73% of the shares of Titan Chemicals, a Malaysian company listed on the main market of Bursa Securities Berhad. In accordance with Malaysian Law, Honam Petroleum is in the process of buying the rest of the shares for a total transaction cost of $1.27 billion, one of the largest cross-border Korean acquisitions.

Sai Ree Yun, head of Yulchon's competition practice, is involved in two of the largest cases against the KFTC, both of which are pending appeal. Yun represents GS Caltex, which is accused of forming a domestic cartel with five other Korean gas suppliers. The fine, originally W167.4 billion ($155 million), was the largest ever sought regarding a domestic cartel, but has been lowered to W55.8 billion.

Yun is also advising Lufthansa Cargo and Swiss International Airlines in another case regarding a global cartel of cargo air carriers. The KFTC imposed a fine of W6.7 trillion ($6 billion), but Yulchon has successfully argued that its clients are exempt from all fines.