Yoon & Yang LLC clearly stood out in last year's competition among domestic law firms to recruit key talent. In May, it brought in Representative Attorney Yun Hee-woong and Foreign Attorney Ryu Myeong-hyeon at the same time, and three months later newly hired Attorney Lee Jin-guk (now head of the M&A team) and Attorney Yun So-yeon. It was a sweeping overhaul of the M&A institutional sector, which had had less presence than other areas within corporations advisory.
The results of the talent acquisitions appeared quickly. Yoon & Yang advised on global private equity firm Carlyle's acquisition of KFC Korea, Naver's acquisition of the Spanish secondhand trading platform Wallapop, and Harim Group's acquisition of Homeplus Express. It is currently acting as sell-side legal counsel in Lotte Group's resale of Lotte Rental and is also assisting with the sale of Mom's Touch, valued at around 1 trillion won.
Ryu, a foreign attorney, is a pillar of the newly built M&A lineup at Yoon & Yang. He began his legal career in 2001 at Woobang, the predecessor to Yoon & Yang, then worked at YulChon before spending 17 years at Sejong starting in 2008, returning to Yoon & Yang last year after 21 years. For about 25 years, he has mainly worked in cross-border M&A, advising on major domestic and international transactions including LG Electronics' acquisition of the U.S. robotics company Bear Robotics; the investment by GIC and Sequoia in Woowa Brothers; GIC's acquisition of equity in Starbucks Coffee Korea; Hanwha Chemical's acquisition of SolarOne (now Qcells); and the KCC–SJL Partners–Wonik consortium's acquisition of U.S.-based Momentive.
Meeting at Yoon & Yang's office in Samseong-dong, Seoul, on the 30th, Attorney Ryu said overseas investors have begun to see Korean corporations not as a simple means to enter the domestic market or as undervalued manufacturers, but as technology, brand, and platform asset with global competitiveness. However, he noted that a legally possible transaction and a transaction that can actually be closed are different, advising that regulatory risks such as merger control, governance, and minority shareholder protection should be reflected in the structure from the outset of the transaction.
The following is a Q&A.
— Yoon & Yang has rapidly improved its advisory track record after successively recruiting key personnel in M&A. What do you see as the biggest change compared with the past?
"I think the capabilities accumulated within Yoon & Yang have begun to show themselves more clearly in the market as we expanded client touchpoints and hired key talent. Yoon & Yang has long had many attorneys with solid expertise across multiple areas, including corporations advisory, financial regulation, antitrust, litigation, tax, and labor. On top of that, we reinforced M&A specialists and, in particular, significantly strengthened our ability to handle cross-border transactions.
Another important change is that market trust is growing as we actually execute transactions at the level demanded by global private equity funds and large strategic investors (SI). Carlyle's acquisition of KFC Korea, large Naver-related transactions, and transactions involving financial companies and digital asset are all complex transactions that are difficult to handle with expertise in only a single area.
That said, I do not think we are complete yet. Rather, I see this as a stage where we are preparing for a bigger leap. There is good momentum building across the organization, but it is important to translate that into sustained performance and client trust. If so, we can establish ourselves as one of the first law firms that domestic and overseas clients think of when considering important M&A."
— Large M&A requires collaboration not only on buy- and sell-side advisory but also across areas such as merger control, finance, tax, and labor. What strengths does Yoon & Yang have in this integrated advisory capability?
"From a client's standpoint, there is no time to receive antitrust, finance, tax, labor, personal data, disclosure, and litigation risks separately and then reassemble them. It is important to integrate multiple issues into a single transaction strategy and clearly show which risks can be tolerated and which must be resolved. Yoon & Yang's strength lies in this integration capability. Experts in antitrust, financial regulation, tax, labor, personal data, litigation, and criminal/compliance join together from the start of the transaction.
In large transactions, unexpected issues continue to arise until closing. Additional information may be requested in merger reviews, permits and approvals may be delayed, and labor, unions, franchisees, and minority shareholder issues may affect the transaction timeline. Yoon & Yang seeks to reflect such issues from the stage of designing the transaction structure, rather than handling them after the fact."
— Carlyle's acquisition of KFC Korea is a representative case of a foreign private equity fund acquiring a domestic consumer company. What aspects of domestic dining and consumer companies do overseas investors find attractive, and do you see cross-border M&A in this field becoming more active?
"When overseas investors look at domestic dining and consumer corporations, the most important factors are the durability of the brand, the store network, operational efficiency, digital scalability, and the potential for expansion in Asian markets.
By sheer size, the Korean consumer market is not as large as the United States or China. But consumers are sophisticated, trends change quickly, and responses to brands are very sensitive. So a brand or operating model that has been proven in Korea can serve as a highly meaningful test bed from the perspective of overseas investors. This is why their interest continues in dining, F&B, beauty, healthcare, and lifestyle brands.
From the investor's standpoint, they will consider brand operating capability, potential to expand the store base, synergies with existing portfolios, and long-term growth strategy together. In particular, how it can be linked with other consumer and dining portfolios they already own is a key point.
Cross-border M&A in this field is likely to become more active going forward. But not all consumer companies will attract attention. When the domestic economy is not strong, investors take a more selective approach. Ultimately, attention will focus on corporations with strong brand power, proven per-store profitability, and stable management of franchisee, supply chain, and labor issues."
— Like Mom's Touch, consumer and franchise corporations that have secured a brand and franchisee network in the domestic market are assets that can draw interest from both overseas SIs and global private equity. In the sale of such companies, what elements do investors look at most closely, and what are the key issues in legal due diligence?
"Rather than commenting on any specific company, speaking in general terms from experience, there are four main things investors consider most in consumer and franchise corporations.
First is the brand's sustainability. It matters whether it is a temporary fad or a brand that can maintain long-term customer loyalty. Second is unit economics at the store level. Even if the headquarters' sales look strong, long-term growth is difficult if franchisees are not actually generating profit. Investors look very closely at same-store sales growth, closure rates, capacity for new openings, profitability per store, and the revenue-sharing structure between headquarters and franchisees.
Third is the relationship with franchisees. You cannot acquire a franchise company by looking only at the headquarters. The franchise agreement structure; spending on advertising and promotions; the structure of materials and supplies; the history of disputes with franchisees; and antitrust issues are all key due diligence items. Fourth is scalability. They look at room for additional domestic openings, potential for overseas expansion, and growth potential through digital channels such as delivery apps, proprietary apps, and memberships."
— When overseas investors acquire Korean corporations, where do they feel the biggest gap between initial expectations and the actual transaction process? I am also curious about market practices or regulations in Korea's M&A market that overseas bidders often misjudge.
"The biggest difference overseas investors feel is that Korean M&A is not a market that ends with contract negotiations. Antitrust, financial regulation, foreign investment, industry-specific permits and approvals, labor, unions, franchisees, minority shareholders, and even the media and public sentiment can all affect the transaction.
There are three areas of frequent misjudgment. First is excessive optimism about regulatory timelines. It is hard to judge merger reviews, approvals from financial authorities, and industry licenses by statutory deadlines alone. In practice, timelines can be extended depending on document submissions, follow-up inquiries, market feedback, and discussions on remedies.
Second is underestimating listed-company M&A and governance issues. In Korea's market recently, protection of minority shareholders, directors' duties, the fairness of merger pricing, treasury shares, and tender offers have become very important. You must consider not only whether a structure is legally possible but also whether the market and shareholders can accept it.
Third is the importance of stakeholder management. Communication with employees, unions, franchisees, counterparties, financial institutions, and government agencies can affect the success or failure of a transaction. Overseas investors sometimes view this as outside the law, but in reality it is an important part of transaction risk.
Therefore, we explain to overseas investors that in Korea you have to look at legal feasibility and execution feasibility together. Whether a transaction is legally possible and whether it is actually closable can be separate issues."
— How has the view of overseas investors toward domestic corporations changed compared with the past? What are the characteristics of domestic industries and asset that overseas bidders are particularly interested in recently?
"In the past, overseas investors often saw Korean corporations as relatively undervalued manufacturing asset or as a means of entering the domestic market. The view has changed a lot now. There is a growing trend to see Korean corporations as technology, brand, and platform asset with global competitiveness.
Fields that overseas bidders have recently shown interest in include artificial intelligence (AI), semiconductor materials, parts and equipment, batteries, power infrastructure, bio and healthcare, medical devices, K-beauty, F&B, content, digital finance, platforms, and data-related industries. The common thread is that these are not businesses confined to the domestic market but ones with global scalability or industries where Korea has a competitive edge.
Another area of high interest is noncore asset coming out of business restructurings at large corporate groups. From the perspective of large companies, they need to focus capital on core businesses, while for overseas investors and private equity funds, it is an opportunity to acquire business units or subsidiaries that have already achieved a certain scale with proven performance."
— Variables such as merger control reviews can determine the success or failure of M&A. How are recent M&A contracts reflecting these regulatory risks? If reviews are delayed or disallowed, how do sellers and buyers usually allocate responsibility?
"In recent M&A, merger control reviews are seen not as a simple follow-up procedure but as a key risk that can determine the success or failure of a transaction. Therefore, even before signing, parties examine in considerable detail which countries require filings, how to define the relevant market, whether there are competition concerns, the possibility of remedies, and the likely review period.
Contracts are also incorporating more sophisticated mechanisms to reflect such regulatory risks. Making regulatory approval a condition precedent to closing is basic, and the parties specify in detail the duty to cooperate, control over submissions and engagement with authorities, the scope of acceptable remedies, and the long-stop date allowing termination if approval is not obtained within a set period. Depending on the transaction, they may also stipulate a break fee.
Particularly in transactions with high merger-control risk, the so-called "hell or high water" clause (an absolute performance clause meaning that contractual obligations must be fulfilled no matter what) may be discussed. This clause typically imposes very strong obligations on the buyer to take the steps necessary to obtain regulatory approval. For example, it may require the buyer to accept remedies demanded by authorities, the sale of assets within a certain scope, operational restrictions, or conduct remedies.
However, in actual contracts, it is extremely important to define the scope of those obligations. Risk allocation between the parties varies greatly depending on whether the obligation is unlimited or excludes measures exceeding certain thresholds for amount, business units, or materiality.
Responsibility sharing depends on the transaction structure. Where competition concerns arise due to the buyer's existing business portfolio, the buyer often bears a greater burden. Conversely, if the target company's own regulatory violations or inaccuracies in information provided by the seller are the issue, seller liability can become the focal point.
That said, the most important thing is to design from the outset a structure with a high likelihood of approval rather than relying on after-the-fact allocation of responsibility. In transactions with high merger-control risk, it is becoming far more important to accurately assess potential competition constraints at the early stage and, where necessary, prepare a strategy for dealing with authorities that contemplates remedies or alternative structures, just as much as which clauses to include in the contract."
— A gap in price expectations between sellers and bidders is still cited as an obstacle to concluding M&A. What needs to improve to bridge this gap?
"The price-expectation gap will remain an important issue for the time being. Sellers remember peak valuations in the past, while bidders take a conservative view on price, reflecting interest rates, economic uncertainty, earnings volatility, and exit risk. If this gap does not narrow, it is hard to close transactions.
To resolve this, sellers first need realistic price expectations. Bidders also need to offer structural alternatives rather than simply lowering the price. For example, parties can use earn-outs (a structure where part of the purchase price is paid later depending on post-acquisition performance), price-adjustment mechanisms, vendor loans (the seller lends part of the purchase price to the buyer), staged equity acquisitions, minority investments followed by call options, and performance-linked structures.
They must also reduce information asymmetry. If the seller provides sufficient materials early and uses vendor due diligence to organize key issues in advance, it can lower the uncertainty premium that bidders add. As uncertainty declines, the price can improve."
— Looking at the domestic M&A market in the second half, what legal and regulatory risks are most likely to derail transactions?
"First, merger control reviews. Transactions with high market concentration or competition concerns require close scrutiny from the outset. In particular, if the competition authority's review drags on or stronger-than-expected remedies are required, that can directly affect the transaction timeline and contract terms.
Second is protection of minority shareholders and governance issues in listed-company M&A. Mandatory tender offers, treasury shares, merger pricing, and directors' duties can have a major impact on transaction structures going forward. You should consider not only whether a structure is legally possible but also whether the market and shareholders can accept it.
Third is exit-related regulatory risk in private equity transactions. In particular, in structures involving a portfolio company's IPO, a subsidiary listing after a carve-out, or a parent and subsidiary listing simultaneously, duplicate-listing regulations and general shareholder protection can be important variables. Because private equity funds consider exit routes from the acquisition stage, duplicate-listing rules and governance issues can directly affect transaction price and structure. In addition, in highly regulated industries such as financial companies, platforms, data, virtual assets, and franchises, separate permitting and licensing risks must also be considered.
Ultimately, while there will be many opportunities in the second-half M&A market, even good transactions can stall midstream if legal and regulatory risks are not properly structured early on. Therefore, a comprehensive approach that reviews merger control, governance, minority shareholder protection, and exit possibilities from the start of a transaction will become even more important."