Before the KFTC Reviews a Merger, You Must Self-Certify

Filing comes before review

When you hear “business combination review,” the first image that comes to mind is probably the Korea Fair Trade Commission (KFTC) examining a deal and either clearing it or blocking it. But before that review can even begin, the company has to file a report first—and before filing, there’s a surprisingly long list of questions the company has to answer on its own. Is this deal even subject to filing? Does it need to be filed right after signing the contract, or can it wait until the deal closes? Which form applies, and which review track does it fall under? The summary form attached to a standard filing even has a line item where the company itself has to write down “whether this deal qualifies for simplified review, and why.”

This piece walks through, in the order the statutes actually present them, the judgment calls that legal and finance teams should work through—before opening a KFTC form—when a deal involves an equity investment, acquisition, merger, or business transfer. The baseline here is the Fair Trade Act (the version effective as of October 2, 2026), its Enforcement Decree (effective March 24, 2026), and two KFTC notices, the “Guidelines on Reporting Business Combinations” and the “Review Standards for Business Combinations” (both as amended on August 7, 2024)—all as they stand on October 15, 2026.

First, Does This Deal Need to Be Reported?

The duty to report arises only when two conditions overlap: the shape of the deal has to fall under one of the business combination types defined by law, and the size of the parties involved has to clear a threshold.

The Shape of the Deal: Five Types

The Fair Trade Act (Korea’s competition law) splits business combinations into five types under Article 9, and Article 11 specifies which of those actually require reporting.

Type	When reporting is required	When reporting is exempted
Share acquisition/ownership	Acquiring 20% or more of another company’s total issued shares (excluding non-voting shares), or 15% or more if the company is listed. Also when a shareholder who already holds that percentage or more makes an additional acquisition and becomes the largest shareholder1	Purchases from specially related persons2, among others
Interlocking directorates	When the reporting company is a large-scale company3 and places its own officers or employees as executives at another company	Interlocking directorates among affiliates; cases where the interlocking executive accounts for less than one-third of the other company’s total executives and is not a representative director
Merger	Merging with another company	Mergers between a parent and subsidiary under Article 342-2 of the Commercial Act (Korea’s corporate law)
Business transfer	Acquiring, leasing, or taking over management of all or a material part of another company’s business	Business transfers between a parent and subsidiary; simple asset purchases of real estate or equipment not used in business operations
Participation in company formation	Participating in the establishment of a new company and becoming its largest shareholder	Participation in forming a private equity fund (PEF), among others

When calculating shareholding percentages, shares held by specially related persons are added together. The Enforcement Decree (the law’s implementing regulation) defines the 20% (15% for listed companies) threshold as the moment the ratio “crosses from below to at or above” that line. So a company that already holds 30% and raises its stake to 35% doesn’t trigger a new reporting duty under this clause alone — but if that additional acquisition makes it the largest shareholder, reporting kicks in again.

The “material part” of a business transfer has a numerical test attached to it. The Notice on Reporting Procedures (a KFTC administrative notice) treats a transfer as material when the business could operate as an independent unit, or would meaningfully shrink the transferring company’s revenue, and the acquisition amount is either 10% or more of the transferring company’s total assets at the end of its previous fiscal year, or ₩10,000,000,000 (~$7.4M) or more. The acquisition amount includes any liabilities assumed along with the business.

The Size of the Companies: ₩300 Billion and ₩30 Billion

The size threshold is set out in Article 18 of the Enforcement Decree. Reporting is required when one company has total assets or revenue of ₩300,000,000,000 (~$222M) or more, and the other has ₩30,000,000,000 (~$22M) or more. Direction doesn’t matter — even if the ₩30 billion company is the one buying more than 20% of the ₩300 billion company’s shares, it still has to report.

There are a few easy-to-miss rules in how these numbers get counted.

• As of when. Total assets are taken from the balance sheet at the end of the fiscal year immediately preceding the one in which the combination occurs, plus any increase from new shares or bonds issued that year. Revenue is taken from the income statement for the preceding fiscal year. For financial and insurance companies, the larger of total capital or paid-in capital is used, together with operating revenue.
• Whose numbers get combined. The size of every company that remains an affiliate both before and after the combination is added together. The transferring company in a business transfer, and the counterparty in a merger between affiliates, are measured on a standalone basis instead.
• When a foreign company is involved. If both parties are foreign companies, or a domestic company is combining with a foreign one, reporting is required only when each foreign company’s domestic revenue is ₩30 billion or more.

There’s also a case where reporting is required even if the counterparty falls short of ₩30 billion: when the transaction value is ₩600,000,000,000 (~$444M) or more and the acquired company has a substantial level of activity in Korea. The Enforcement Decree defines that activity threshold as having provided goods or services to 1,000,000 or more users per month in Korea at any point over the preceding three years, or having continuously maintained domestic research facilities and personnel while spending ₩30 billion or more annually on domestic R&D at any point in that period. The provision exists to catch deals where a company with modest revenue but a large user base or research footprint is being bought at a steep price. The transaction value includes not just the share consideration but also the proportional share of liabilities assumed.

Conversely, there are cases where the law exempts a deal from reporting even though both size and shape conditions are met. The main examples are venture investment companies or venture investment associations acquiring shares in startups or venture businesses; new-technology business finance companies or new-technology business investment associations acquiring shares in new-technology business operators; share acquisitions by investment companies, private infrastructure project operators, or real estate investment trusts; and participation in forming a PEF (Article 11(3)). Combinations that the relevant ministry has already consulted on with the KFTC (Korea Fair Trade Commission) under a separate statute are also excluded from the reporting requirement.

One more thing worth flagging: some guides online list size thresholds that no longer match the current Enforcement Decree. It’s worth double-checking the numbers against the current text of the Enforcement Decree on the Ministry of Government Legislation’s website (Korea’s official legislative database).

Filing Right After the Contract, or After the Deal Closes

Once you’ve confirmed that a deal is subject to filing, the next question is timing. That call reshapes the entire deal calendar.

The Default: Post-Closing Filing, Within 30 Days

As a rule, filings are due within 30 days of the business combination date. Article 17 of the Enforcement Decree defines what counts as that date, by transaction type.

Type	Business Combination Date
Acquisition of existing shares	The date the stock certificate is delivered. If there’s no certificate, the date payment is made — or, if voting rights effectively transfer earlier, that date
Acquisition of new shares	The day after the share payment due date
Interlocking directorate	The date the shareholders’ meeting resolves to appoint the officer
Merger	The date of merger registration
Business transfer	The date payment for the transfer is completed. If completion comes more than 90 days after the contract date, the date 90 days after the contract date
Participation in incorporating a company	The day after the payment due date for allotted shares

The 90-day rule for business transfers matters in deals that drag on. Even if full payment is delayed because it’s being made in installments, once 90 days have passed since the contract date, that date becomes the business combination date — and the 30-day filing clock starts running from there.

When a Large Company Is Involved: Pre-Closing Filing

If even one of the parties is a large company (combined assets or revenue across affiliates of ₩2 trillion (~$1.4 billion) or more) and the deal is a share acquisition, merger, business transfer, or participation in incorporating a company, it’s subject to pre-closing filing. Deals involving a small target company filed under the ₩600 billion (~$430 million) transaction-value threshold are also pre-closing filings. The pre-filing period runs from the day after the triggering event until just before the business combination date.

• Share acquisition: the date the parties contract or agree to purchase shares, or the date a board resolution is passed
• Merger / business transfer: the date the merger agreement or business transfer agreement is executed
• Participation in incorporation: the date a shareholders’ meeting (or a board resolution standing in for one) resolves to participate in the incorporation

The heaviest provision in pre-closing filing is the standstill requirement. Until you’ve been notified of the FTC’s review outcome, you cannot acquire the shares, register the merger, execute the business transfer agreement, or take up the shares (Article 11, Paragraph 8). The filing-procedure notice treats a business transfer as “executed” once payment is complete — but even before that, if movable property has been delivered, real estate registered, or a trademark (etc.) registered, it still counts as execution. Buying shares through on-exchange competitive trading, a rise in shareholding from forfeited shares in a rights offering, tender offers, transfers by testamentary bequest, and enforcement of security interests are all left as post-closing filings even when a large company is involved.

Review Periods and Fines

The FTC notifies its review outcome within 30 days of the filing date, and may extend that by up to 90 days if needed. If the commission orders supplementary documents, the time spent on that supplementation doesn’t count toward the period. For deals subject to pre-closing filing, that means you need to leave at least 30 days — and potentially much more — open when setting the closing date.

There’s also a voluntary pre-review, where parties can ask the FTC to assess potential competitive restraints even before the formal filing period begins. This, too, is notified within 30 days, with a possible 90-day extension.

Failing to file, filing falsely, or — for deals subject to pre-closing filing — closing before notification can trigger fines of up to ₩100 million (~$71,000) for the company and up to ₩10 million (~$7,100) for executives and employees (Article 130). Law firm Shin & Kim noted in 2023 materials that financial institutions and investors with assets or revenue above ₩2 trillion often got fined for exactly this kind of oversight: buying a minority stake, appointing a few officers, and simply forgetting to file for the interlocking directorate. A 2024 amendment later removed interlocking directorates involving less than one-third ownership or non-representative directors from the filing requirement — but appointments above that threshold are still subject to filing.

Simplified Filing and Simplified Review Aren’t the Same Thing

The names sound alike, so it’s easy to conflate them, but these two terms rest on different regulations and serve different purposes.

Category	Simplified Filing	Simplified Review
Basis	”Guidelines on Reporting Business Combinations"	"Business Combination Review Standards”
What it determines	Which form and attachments to submit	How deeply the KFTC reviews the case
Example cases	Cases where the reporting company and the counterparty are related parties; combinations involving special purpose vehicles for securitization; additional capital contributions as a limited partner into an already established PEF (private equity fund); formal filings for combinations that have already cleared voluntary pre-review, etc.	Combinations between related parties; combinations that don’t establish a controlling relationship4; conglomerate-type combinations5 between companies that aren’t large enterprises; conglomerate-type combinations with no complementarity or substitutability; combinations that are clearly simple investments; combinations involving foreign target companies with no impact on the domestic market, etc.
Outcome	Fewer attachments are required	In principle, the KFTC only checks whether the filing’s facts are accurate and notifies the result within 15 days

The scope of cases eligible for simplified review is broader than that for simplified filing. That’s why some deals get submitted using the standard filing form but end up being processed as a simplified review. In this case, it’s the company itself that first determines whether the deal qualifies for simplified review. The “Business Combination Overview” attached to a standard filing requires the company to describe, from its own perspective, the details and rationale of the deal; whether it qualifies for simplified review under the review standards and why; whether a controlling relationship arises; how the product market and geographic market were defined; its view on whether competition is restricted; and the expected efficiency effects.

There’s one exception for conglomerate-type combinations. If an online platform operator combines with a company or business unit that had an average of at least 5,000,000 domestic monthly users in the preceding year, the deal won’t be treated as a simplified review even if it appears to lack complementarity or substitutability.

The attachments required for a standard filing are substantial. Taking a stock-acquisition filing as an example, they include: the shareholder status of both the reporting company and the counterparty; the status of affiliates; a market overview covering supply, demand, and competitive conditions for major products; the overview document; supporting evidence such as contracts; a plan for any interlocking directorates; a certified copy of the corporate register; and an audit report. For a simplified filing, most of these are replaced by the Simplified Filing Supplementary Materials (Attachment 6) along with supporting evidence.

Filings are, in principle, submitted through the KFTC’s online Business Combination Filing System (mna.ftc.go.kr). The guidelines note that if the transaction structure is complex or involves multiple relevant markets, making a standard filing difficult, companies can request a pre-filing consultation with the KFTC by email.

Last Year’s Reviews: 590 Cases

According to a report covering the Korea Fair Trade Commission (FTC)‘s “2025 Merger Review Trends and Key Features,” released on February 4, 2026, the number of merger reviews in 2025 came to 590 cases — down 208 cases (26%) from 798 in 2024. That follows 1,113 in 2021, 1,027 in 2022, and 927 in 2023 — a fourth straight year of decline. The report attributed this to the expanded filing exemptions that took effect in August 2024, along with a drop in deal activity amid economic uncertainty.

Unlike the case count, the total transaction value rose roughly 30%, from ₩276.3 trillion (~$199.5 billion) the previous year to ₩358.3 trillion (~$258.9 billion). Large overseas deals — like Synopsys’s acquisition of Ansys — pushed the figure up. By method, stock acquisitions led with 321 cases (54.4%), followed by business transfers (98), joint venture formations (96), interlocking directorates (38), and mergers (37).

The FTC conducted in-depth reviews on 50 cases, with corrective measures imposed in 3. That’s about 8.5% of the 590 total (editor’s calculation) — meaning over 90% of cases never reached in-depth review. That ratio, however, is based only on the review-count figures; the report doesn’t specify how many cases were handled through simplified review.

Oswarld’s Lens

What struck me while putting this material together is that even though the system is called a “review,” the starting point is the company’s own self-classification. The company decides first whether a deal is reportable at all, whether it falls under pre- or post-closing notification, and whether it qualifies for simplified review — and writes that judgment into the filing. When you set that against the numbers — 50 in-depth reviews out of 590 filings — it becomes clear that for most deals, what practitioners actually experience as “merger review” is less the Fair Trade Commission’s competitive assessment and more the classification work done at the filing stage.

That’s why I think this judgment is better handled with finance and strategy teams at the early stage of structuring the deal, rather than treated as a checklist item the legal team picks up at the last minute. If a deal is subject to pre-closing notification, the full purchase price can’t be paid before the Fair Trade Commission issues its notice, and for business transfers, the merger date is automatically fixed once 90 days pass after signing. If whoever sets the closing date doesn’t know this rule, the timeline ends up colliding with the law.

Closing

Whether you’re subject to reporting, when to file, which track applies. These three questions need to be settled before you even open the Fair Trade Commission’s filing form. Check the numbers against the current enforcement decree’s original text, and for deals with ambiguous structure, it’s safer to confirm through pre-filing consultation with the Fair Trade Commission or expert review. This piece explains the system — it isn’t legal advice for any specific transaction.

---

💬 At Reader‘s company, who’s the first to check whether a business combination filing is required when reviewing an equity investment or business transfer — legal, finance, or outside counsel? Let me know in the comments. 📨 If you have a colleague working on an M&A deal or equity investment, pass this along to them.

References & Further Reading

Primary sources

• Ministry of Government Legislation, Monopoly Regulation and Fair Trade Act, Act No. 22043, effective October 2, 2026. Article 9 (Restrictions on Business Combinations), Article 11 (Reporting of Business Combinations), Article 130 (Administrative Fines) ··· this is the original text covering reporting types, pre- and post-combination filing, standstill obligations, review periods, and administrative fines.
• Ministry of Government Legislation, Enforcement Decree of the Monopoly Regulation and Fair Trade Act, effective March 24, 2026. Articles 15, 17–20 ··· this is where the ₩300 billion (~$216 million), ₩30 billion (~$21.6 million), ₩2 trillion (~$1.44 billion), and ₩600 billion (~$432 million) thresholds live, along with the definition of the combination date and the starting point for pre-combination filing.
• Korea Fair Trade Commission, Guidelines for Reporting Business Combinations, Notice No. 2024-14, August 7, 2024 ··· this notice sets out what qualifies for simplified reporting, the forms and attachments required by combination type, and the “material portion” standard for business transfers.
• Korea Fair Trade Commission, Business Combination Review Standards, Notice No. 2024-15, August 7, 2024 ··· the source for what qualifies for simplified review and the principle of a 15-day processing period.
• Etoday, “Business Combination Reviews Fell in Number But Rose in Value Last Year — Driven by a Surge in Large M&A,” February 4, 2026 ··· the most detailed reporting of the Fair Trade Commission’s “2025 Business Combination Review Trends and Key Features,” covering statistics by count, value, and method.

Background

• The Fact, “590 Business Combination Reviews Last Year — AI and K-Culture ‘Active’,” February 4, 2026 ··· coverage of the same announcement, useful for cross-checking year-over-year trends.
• Shin & Kim, “Pre-Announcement of Fair Trade Act Amendments and Its Implications (1): Reform of the Business Combination Reporting and Review Regime,” February 16, 2023 ··· explains the intent behind the amendment that led to the expanded filing exemptions in 2024, along with cases of missed reporting for concurrent executive positions. As this material dates from the pre-announcement stage, confirm the finalized provisions against the statutory text above.

---

The author is Oswarld (Kwangseob Ahn). Current roles: Adjunct Professor at Sejong University, Strategy Consultant at INLEVEL9. Career, research, books, and recent work are kept current on the About page. Latest · July 2026: HEMA-2: A Consolidation-Aware Tri-Memory Architecture with Multi-Channel Scheduling for Lifelong Conversational AI.

📝 Glossary

Footnotes

1. Largest shareholder: the shareholder holding the biggest stake in a given company. When calculating the ownership ratio, holdings by related persons are added in. ↩

2. Related persons: parties linked to a company through control or affiliate relationships, as defined by Article 14 of the Enforcement Decree of the Fair Trade Act. In business combination filings, their shares are combined with the filer’s own when calculating ownership ratios. ↩

3. Large-scale company: a company whose combined assets or sales, including affiliates, total ₩2 trillion (~$1.44 billion) or more (Enforcement Decree Article 15, Paragraph 3). This threshold determines whether concurrent-executive reporting and pre-combination filing requirements apply. ↩

4. Control relationship: a relationship in which the acquiring company becomes able to control the management of the acquired company. The criteria for this determination appear in Section IV of the Business Combination Review Standards. ↩

5. Conglomerate-type combination: a combination between companies that are neither competitors (horizontal) nor connected through a production-distribution chain, such as raw material and finished product (vertical). ↩