▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news items for each reader type.
[Key Issue Briefing]
■ Race to close deals: South Korea's mergers and acquisitions market has heated up as large-scale infrastructure investment tied to artificial intelligence innovation converges with restructuring in advanced industries. With acquisition financing rates climbing to around 7% on a senior debt basis, driven by the Bank of Korea's successive base rate increases and rising global rates, both buyers and sellers are moving quickly to settle balances whenever terms align.
■ China's oil shutdown: China abruptly played the card of halting oil product exports, delivering another shock to a global market already strained by supply disruptions from two wars — one involving the United States and Iran, the other Russia and Ukraine. Facing public anger over soaring diesel prices, U.S. President Donald Trump considered banning exports of American diesel but has held off for now amid strong pushback from the refining industry.
■ Chey's stake sale: SK Group Chairman Chey Tae-won is selling a 2.3% stake in holding company SK for 944 billion won to fund a divorce settlement with Noh Soh-yeong, director of Art Center Nabi. It is the first time Chey has carried out a genuine sale rather than a transfer among related parties since the group adopted its new holding company structure in 2015, 11 years ago.
[News of Interest to Corporate CEOs]
- Key summary: With trillion-won megadeals piling up as buyers move to secure core assets such as AI data centers, cumulative M&A transaction value through the third quarter of this year reached 62.053 trillion won, surpassing last year's full-year total of 61.3989 trillion won in just nine months. Another factor behind the surge in deals is the drive to head off funding risk from rising interest rates. With acquisition financing rates rising to around 7% on a senior debt basis, analysts say there is a stronger tendency to close deals before borrowing costs rise further or lending terms tighten. As a handful of megadeals shaped overall results, the advisory market landscape also shifted. In financial advisory, Deloitte Anjin advised on deals worth 2.0442 trillion won, overtaking Samil PwC for the top spot, while in legal advisory, Kim & Chang maintained its dominant position with 28 deals worth 8.6772 trillion won for a 46.97% market share.
2. China Abruptly Shuts the Door Amid Supply Crunch; Pressed Trump May Lock Up U.S. Supply
- Key summary: International prices surged after China, which had continued supplying oil products on the strength of massive inventories even after the war began, suddenly barred exports. Russia, the world's third-largest crude refiner, is short of fuel at home because of its energy strikes with Ukraine and has restricted gasoline exports until the end of January next year and diesel exports until the end of October. According to The Wall Street Journal, U.S. refinery utilization stands at an overheated 97%, while crude and energy analytics firm Vortexa estimated that Chinese refiners are running at only about 75% of maximum capacity, leaving room to export an additional 100,000 barrels of diesel a day in the fourth quarter. The Trump administration is raising the pressure by calling on Europe to release diesel reserves as an alternative, but observers say a prolonged Chinese embargo could lead to a ban on U.S. diesel exports.
3. Chey Tae-won Raises 944 Billion Won for Divorce Settlement by Selling SK Stake
- Key summary: SK disclosed on the 2nd a change in ownership under which largest shareholder Chairman Chey Tae-won will sell 1,653,924 shares, with the actual sale to take place a month later on Nov. 2. Chey's personal stake will fall to 15.5% from 17.9%, and the stake including related parties to 22.9% from 25.2%. Of the 944 billion won in proceeds, 544 billion won will be handled through a block sale to strategic investors and the remaining 400 billion won through a price return swap, or PRS, a contract in which the parties settle gains and losses based on share price movements, with securities firms. The structure was designed to minimize market impact such as a drop in the share price from the stake sale, according to the company.
4. Past Last Year's Total in Three Quarters: A Hot M&A Market [Signal]
- Key summary: The domestic M&A market saw favorable conditions in the third quarter as major business groups searching for new growth engines aligned with the investment strategies of private equity funds. Deals completed in the third quarter totaled 108, worth 14.9657 trillion won, more than 4 trillion won above the 10.9237 trillion won in the same period last year. During the quarter, global private equity firm Carlyle wrapped up its acquisition of Chungho Nais in a deal worth 1 trillion won, E-Mart (139480) and Shinsegae (004170) bought the remaining stake in SSG.com for 1.2711 trillion won, and KG Group acquired K Car from Hahn & Company for 750 billion won. In addition, newly signed deals in progress numbered 50 and totaled 27.0437 trillion won, with trillion-won megadeals set to close as early as this year, including SK Telecom's (017670) sale of a 49% stake in SK Horizon for 3.08 trillion won, Samsung Biologics' (207940) acquisition of PolyPeptide Group for about 2.7 trillion won and Doosan's (000150) acquisition of SK Siltron for 2.3 trillion won.
▶Read the article: Mortgages Above 5% Rise 2.3 Trillion Won: The Shadow of Fighting Inflation With Rate Hikes
▶Read the article: September Consumer Inflation Slows to 2% Range; Core Inflation Rises 2.8%, Highest This Year
