Push for Mandatory 'Fair Value' Assessment in Corporate Mergers
The Healthcare Division of the Korean In-house Counsel Association and Jipyong LLC recently co-hosted a seminar to discuss a proposed amendment regarding the valuation method of stock prices during corporate mergers. This discussion was organized to strengthen the protection of shareholder rights that arise during the process of mergers between companies.
There have been criticisms that the current valuation method applied during corporate mergers does not sufficiently reflect market conditions. Accordingly, the proposed amendment includes provisions that require a comprehensive consideration of various factors, such as asset value and earning power, rather than relying solely on the current stock price when determining the merger value.
Experts emphasize that if this amendment is passed, companies will be required to undergo a more fair and objective evaluation when proceeding with mergers. It is expected that this will contribute to reducing damages to minority shareholders and increasing the transparency of corporate management.
Legal experts who attended this seminar engaged in in-depth discussions on the specific implementation plans for the amendment and its potential impact on the market. Many companies and investors are paying close attention to how the relevant legislation will be discussed in the National Assembly moving forward.