South Korea's Financial Services Commission reported that the National Assembly has passed amendments replacing market-price-based valuations with fair value for mergers and other covered corporate reorganizations. Fair value must reflect market price, asset value and earnings value, reducing incentives to suppress share prices or time transactions around periods of undervaluation. The same factors will apply when determining the price offered to dissenting shareholders exercising appraisal rights. The amendments also require boards to prepare and disclose opinions on a transaction’s purpose, expected benefits and valuation, while an independent third party must assess and disclose the fairness of the valuation or other transaction terms. For transactions between affiliates, companies must additionally disclose interests between related parties and the counterparty, including guarantees, collateral arrangements and overlapping directorships. The amendments will take effect three months after promulgation, following transfer to the government and Cabinet approval. The commission plans to revise implementing regulations to support the new framework.
2026-08-20South Korea Financial Services Commission
South Korea's Financial Services Commission reports parliamentary passage of fair-value merger pricing reforms
South Korea’s National Assembly has passed reforms requiring fair-value pricing for mergers and other covered reorganizations, based on market price, asset value and earnings value. The amendments mandate board review, independent assessment and enhanced related-party disclosures, and will take effect three months after promulgation.