For best results, merge. It seems that the chair of South Korea’s Financial Services Commission (Kim Seok-dong) is considering the merger of two securities companies, Daewoo Securities and Woori Investment & Securities (no. 2 and 3 investment banks by market capitalization). Hopefully this would lead to the creation of a “giant with global potential.” This makes sense as, joined together, the merger would mean they would become South Korea’s largest investment bank.”
Merging Really the Answer?
Maybe. But maybe not. It seems that going large scale isn’t always the solution and even if this merger leads to a giant in South Korea, it won’t necessarily become a global player. The country is still missing the “the necessary cross-border merger-and-acquisitions volume to support a big international investment bank.” As well, since Woori Investment is a Woori Finance Holdings affiliate, it is 57 percent government-owned. So let’s not get too excited too soon. It may make more sense for investors to look into a “combined mega-broker, with bigger domestic clout.”
Other Investment Options?
Perhaps what would thus be more profitable for Woori Investment & Securities would be working with Merrill Lynch, with which it is having talks to purchase its South Korean private banking business. This negotiation would result in “a combined 1 trillion won ($919.5 m) worth of assets from roughly 700 high net worth individuals.”
Woori would definitely gain from this vis-à-vis its private banking. Merrill Lynch has significant expertise in wealth management and this can only be of benefit to Woori Investment.
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