Naver Financial and Dunamu have entered the final review stage of their merger, nearly a year after filing. The Korea Fair Trade Commission (KFTC) has determined that the merger raises concerns about competition in multiple markets but believes that the proposed remedies submitted by the companies can alleviate these concerns.
On November 10, the KFTC announced that it has submitted the merger review report to the commission and initiated the review process. The report was also sent to both companies on November 6.
The full commission meeting to review the merger is expected to take place on November 18. Given that results typically emerge within one to two weeks after such meetings, a decision on approval could come as early as this month.
The merger involves Naver Financial acquiring all shares of Dunamu, with Dunamu shareholders receiving approximately 2.54 shares of Naver Financial for each share they hold. Upon completion of the transaction, Dunamu, which operates the cryptocurrency exchange Upbit, will become a wholly-owned subsidiary of Naver Financial.
The KFTC analyzed a total of 12 merger types across 10 related markets, including payment services, digital asset exchanges, search portals, online advertising and shopping, and financial data management. It identified six mixed mergers between different industries and two horizontal mergers within the same industry. The horizontal merger between listed stock investment platforms and second-hand trading platforms was classified as a 'safe zone' with no competition concerns.
Notably, the KFTC included the yet-to-be-established Korean won stablecoin issuance market in its review. This is unusual as it anticipates potential competition concerns in future markets. The KFTC believes that two vertical mergers and two mixed mergers could arise between stablecoin issuance and digital asset exchanges, payment services, and shopping businesses.
Kim Hye-sun, head of the KFTC's merger review division, explained, "Considering that the Korean won stablecoin is on the verge of legislation and the materials submitted by businesses, we believe that not assessing it as an unformed market could impact future competition."
Since receiving the merger notification on November 28 last year, the KFTC has gathered opinions from various stakeholders and experts. At the end of October, it also heard official opinions from relevant agencies, including the Financial Services Commission. The review process examined whether the efficiency gains from the merger could offset the competition concerns.
The KFTC found that the initial remedies proposed by the companies were insufficient to fully address the competition concerns and requested additional measures. The companies submitted a final proposal reflecting expert opinions and the KFTC's requests for modifications and supplements. The KFTC's review staff suggested corrective measures to prevent the exclusion of competing businesses, including equal treatment of competitors and restrictions on business practices. Specific details have not been disclosed.
Jeon Seong-bok, head of the KFTC's merger review division, stated, "The review staff determined that the concerns about competition in the relevant markets could be alleviated to this extent, which is why the merger report was submitted. Ultimately, the decision will be made at the full commission meeting."
On November 10, the KFTC announced that it has submitted the merger review report to the commission and initiated the review process. The report was also sent to both companies on November 6.
The full commission meeting to review the merger is expected to take place on November 18. Given that results typically emerge within one to two weeks after such meetings, a decision on approval could come as early as this month.
The merger involves Naver Financial acquiring all shares of Dunamu, with Dunamu shareholders receiving approximately 2.54 shares of Naver Financial for each share they hold. Upon completion of the transaction, Dunamu, which operates the cryptocurrency exchange Upbit, will become a wholly-owned subsidiary of Naver Financial.
The KFTC analyzed a total of 12 merger types across 10 related markets, including payment services, digital asset exchanges, search portals, online advertising and shopping, and financial data management. It identified six mixed mergers between different industries and two horizontal mergers within the same industry. The horizontal merger between listed stock investment platforms and second-hand trading platforms was classified as a 'safe zone' with no competition concerns.
Notably, the KFTC included the yet-to-be-established Korean won stablecoin issuance market in its review. This is unusual as it anticipates potential competition concerns in future markets. The KFTC believes that two vertical mergers and two mixed mergers could arise between stablecoin issuance and digital asset exchanges, payment services, and shopping businesses.
Kim Hye-sun, head of the KFTC's merger review division, explained, "Considering that the Korean won stablecoin is on the verge of legislation and the materials submitted by businesses, we believe that not assessing it as an unformed market could impact future competition."
Since receiving the merger notification on November 28 last year, the KFTC has gathered opinions from various stakeholders and experts. At the end of October, it also heard official opinions from relevant agencies, including the Financial Services Commission. The review process examined whether the efficiency gains from the merger could offset the competition concerns.
The KFTC found that the initial remedies proposed by the companies were insufficient to fully address the competition concerns and requested additional measures. The companies submitted a final proposal reflecting expert opinions and the KFTC's requests for modifications and supplements. The KFTC's review staff suggested corrective measures to prevent the exclusion of competing businesses, including equal treatment of competitors and restrictions on business practices. Specific details have not been disclosed.
Jeon Seong-bok, head of the KFTC's merger review division, stated, "The review staff determined that the concerns about competition in the relevant markets could be alleviated to this extent, which is why the merger report was submitted. Ultimately, the decision will be made at the full commission meeting."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.