Washington International Law Journal


Kwang-Rok Kim


Even though the tender offer system in Korea was established in 1976, there were very few tender offer transactions until 1997. However, after Korea's economic crisis in late 1997, the Korean government not only took a series of structural reform measures to improve the securities market system, but also widely opened the financial markets to foreign countries by abolishing or amending restrictions on foreign investment. The 1998 reforms to the Korea Securities Exchange Act included significant changes to tender offer regulations, making hostile takeovers more feasible. Since that time, the tender offer has been used as a tool to acquire control of corporations in Korea. In contrast, tender offers have been prominent in the United States' legal world of corporations and securities for many decades and the law regarding tender offers is well established. This article examines the Korean tender offer regulations in comparison to analogous aspects of the more established securities law of the United States, offering recommendations for amendments to Korean law where applicable. Korea should revise its tender offer regulations to simplify confusing aspects of the regulations and process, force disclosure of information that is important to investors but not currently part of mandatory disclosure, and ease excessive restrictions on trading and voting rights in the tender offer process.

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