President Lee: “M&A must be activated… I hope the decision on mandatory tender offer will not be delayed.”

President Lee Jae-myung said on the 13th, “The market will be normalized only when mergers and acquisitions (M&A) are activated and made easy and numerous.”

President Lee said this at a policy meeting held at the Korea Exchange this morning, saying, “The biggest device for normalizing the market is hostile M&A.”

He then instructed, "To solve the problem of abnormally undervaluing the country like in Korea, M&A must be activated on a large scale to increase the overall pie," and added, "It would be good to discuss in more detail and find ways to revitalize the country."

President Lee also put the controversy over the 50% + 1 share mandatory tender offer, where the interests of major and minority shareholders are conflicting, to an immediate vote.

Experts in the field relatively voted for the plan of 50% + 1 share but distributing it equally to major and minority shareholders.

President Lee said, "I'm closer to the side that grows the pie even if I get criticized, and that all shareholders benefit when M&A is activated and the entire market is normalized, but I can't do it the way I want," and added, "The party will have to continue the discussion, and I hope it doesn't delay too much."

The mandatory tender offer system is a system in which when management rights of a listed company are transferred, the acquirer makes a public offer of more than a certain percentage of stocks to general shareholders, giving minority shareholders the opportunity to share the management rights premium.

The ruling and opposition parties agreed to introduce this system by revising the Capital Markets Act at this year's regular National Assembly.

However, domestic and foreign management companies are opposing the bill currently being discussed, saying that it does not guarantee equal sales opportunities to general shareholders as it is designed to require the acquirer to purchase '50% + 1 share' but to purchase all of the shares of the controlling shareholder first.

President Lee also said, “The goal of the stock market is to allow many people to participate in transactions and receive a fair price, and because of that, it provides various benefits to business owners,” criticizing cases in which some listed companies are operated in a structure in which the owners are effectively monopolized.

At the same time, he ordered improvement of the system, saying, "Shouldn't we take measures to eliminate from the market those that are operated too excessively and practically similar to private companies?"