 On November 15, 2015, an amendment to the Korean Commercial Code (the KCC) was announced. The amendment, which will take effect in February 2016, permits the use of a number of new types of M&A structures, and is intended to better facilitate corporate restructuring and investments. Key changes under the amendment 1. Triangular share exchange, reverse triangular merger, and triangular spin-off (Articles 360-3 and 530-6) The amended KCC will permit the use of a triangular share exchange structure, under which the acquiring company will be permitted to use the shares of its parent company as consideration. As a result of the use of this triangular share exchange structure, companies will be permitted to effectuate a reverse triangular merger1 under the amended KCC. Furthermore, the amended KCC also introduces the concept of a triangular merger for a spun-off business, under which an acquiring company will be permitted to transfer its shares to the shareholders of the spun-off company.2. Appraisal right of dissenting shareholders (Articles 360-5(1) and 374-2) The amended KCC explicitly provides that shareholders holding non-voting shares will be allowed to exercise appraisal rights, and to call for a shareholders’ meeting when it is determined that the shareholders are entitled to an appraisal. 3. Simplification of requirements for small-scale share exchange transactions (Articles 360-10(1) and 527-3(1)) 4. Simplified business transfer/assignment/lease system (Article 374-3) Implications –––––––– |
New amendment to the Korean Commercial Code
