Reason for the Proposal and Main Contents 

Most of the mergers and acquisitions of listed companies in Korea are conducted through stock transfers, during the course of which the major shareholders of the acquired company generally sell their shares at a price that reflects the management premium, while the general shareholders are not given the opportunity to sell, thus raising the opinion that general shareholders suffer significant losses.

Given that major European and Asian countries such as the United Kingdom, Germany, and Japan are implementing a system which requires the acquiring company to publicly purchase all or a certain percentage of the remaining shares when acquiring a certain percentage or more of an acquired company's shares for the purpose of merger and acquisition, the current law is relatively insufficient in protecting the general shareholders.

Accordingly, this proposed revision of the Act aims to provide an opportunity for general shareholders to sell their shares to an acquiring company and to further protect their rights by requiring the acquiring company to publicly purchase a certain percentage or more of the acquired company's shares when purchasing the latter’s shares in the process of changing the management rights of a company (newly established Article 133 (4) and Article 141(3)).