SOUTH KOREA Law and Practice Contributed by: Ki Wook Kang, Kyung Chun Kim, Junghae Kang and Do Kyeom Kim, Lee & Ko
chutes are not permissible under Korean law. There - fore, a prospective acquirer generally does not seek an endorsement of its tender offer bid from the board
once the bidder has been selected as the preferred bidder and only for a short period of time. 5.5 Definitive Agreements It is permissible and common for tender offer terms and conditions to be documented in a definitive agree - ment between the offeror and controlling shareholders of the public target company prior to launching a ten - der offer to public shareholders. The target company is generally not a party to such an agreement. The pro - cedure would usually involve the following two steps: completing a purchase from controlling shareholders and conducting a tender offer to purchase shares from public and minority shareholders. 6. Structuring 6.1 Length of Process for Acquisition/Sale Whilst the precise length of a particular transaction may differ depending on the circumstances, the dura - tion of M&A transactions is generally similar to that observed in many other jurisdictions. In general, due diligence takes around four to six weeks; following this, negotiation, finalising the transaction documents, the internal approval process and execution take around one to two months. Execution to completion usually takes two to three months, which can vary largely depending on how long regulatory approvals, especially business com - bination reports, take. For transactions that could be deemed to restrain competition or those requir - ing merger filings in multiple jurisdictions, it may take significantly longer to close the transaction. However, for M&A transactions in which a special resolution of a general meeting of shareholders is required, such as the merger of a listed company or a transfer of all or an important part of the company’s business, a minimum of two and a half months may additionally be needed. This is because it takes at least one and a half months to convene a general meeting of a listed company, plus about one month for mandatory procedures, such as the creditor pro - tection procedure, as required under the KCC.
of directors of the target company. 5.2 Market Practice on Timing
Although parties may choose to make a voluntary disclosure earlier than as required under the laws, in the vast majority of cases, disclosure is only made at the time when it is required under the relevant laws. On rare occasions, parties decide to make voluntary disclosures in order to respond to media reports or to co-ordinate the timing of disclosures to be made at multiple stock exchanges. 5.3 Scope of Due Diligence The scope of due diligence conducted in Korea is gen - erally on par with other international jurisdictions when it comes to key aspects. The scope of due diligence is determined on a case-by-case basis depending on the particular needs of the relevant parties, the nature of the proposed transaction and the characteristics of the target company. Common areas of due diligence involve legal, tax, business and accounting issues. Environmental, HR and technology, including IT sepa - ration, issues may also be covered. Legal due diligence generally covers such areas as general corporate, permits and licences, compli - ance with regulations, contracts, assets, intellectual property, insurance, litigation, HR, fair trade and per - sonal information. In-person interviews have gener - ally been replaced with virtual interviews and physical data rooms with virtual data rooms post-COVID-19, although this has not particularly limited the scope of the due diligence conducted. 5.4 Standstills or Exclusivity If a listed company is involved, standstill provisions or agreements are usually requested at an early stage of the deal process if they are negotiated between the parties. Exclusivity provisions are also requested on a case- by-case basis by potential investors. However, sig - nificant M&A transactions are frequently structured as auction deals where the seller does not accept such exclusivity provision or only accepts such provision
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