An interest on M&A as a strategic tool for corporate survival and business portfolio diversification has been greatly increasing in Korea. In recent years, Korean government and investors have been attracted by M&A because M&A activities have influence on the target firm’s organizational structure, ownership structure, resource allocation and stockholder’s wealth. Therefore, Korean government eliminates or relaxes the restriction on M&A gradually and few months ago exclusive funds for M&A were approved. These funds will activate hostile M&A in the Korean M&A market. However, hostile M&A can bring about serious conflicts among interest group. Also, the Korean M&A market have been opened to foreign investors since 1998. Now foreign investors will be able to take over domestic companies through hostile M&A. Under these circumstances, Korean M&A market is expected to be very active and domestic companies need their own strategies to protect from hostile M&A.
This study is designed to investigate the defense strategies for hostile M&A. First, this study investigates various theories on M&A and then examines Korean M&A market change and situation. Finally, this study analyzes several Korean hostile M&A cases and then suggests appropriate defense strategies based on Korean M&A market situation.
