Yun: Transformation First Step to 'New Beginning'
SEOUL, April 19, 2011 - "Transformation is a trend and the
theme is globalization," said Chairman Young-Gak (Ken) Yun of Samjong KPMG, at
the monthly Asia Society Korea Center luncheon held at the Lotte Hotel Seoul,
"but that also includes cross-border mergers and acquisitions."
Yun spoke on the need for companies in Asia, and
in particular Korea, to broaden their approach to globalization by investing in
cross-border mergers and acquisitions (M&A's) to guarantee longevity. He cited companies like Apple,
Suzlon, and the Korean company Doosan as examples of successful cross-border
M&A's that led to their sustainable transformation in a globally
While there is currently a trend of "Asianization,"
with China leading economic growth worldwide, the aggregate GDP of Northeast
Asia is still smaller than Europe and North America combined even when
accounting for ASEAN. Yun commented that while Korea has done well over the
last 60 years via an economic transformation from heavy industries to
information technology and now globalization, it still lags behind in some
institutional rankings, such as the UNDP's Human Development Index and the
Corruption Perception Index.
Additionally, Yun explained, the number of Fortune 500 companies
in Korea has fluctuated in tandem with the US, Japan, and the UK, while China
has gone from zero in 1993 to 46 in 2010, showing the greatest transformation from a
global factory to a global bank.
Yun urged traditionally family-owned Korean
companies to discover the value of shareholders; he welcomed
the idea of continued Chinese investment in Korea as it may fend off North Korean aggression, and thinks that Korean companies can only
benefit from the Chinese acquisition of companies with low valuation. When responding to the domestic market
in Korea, however, Yun stressed the idea of "responsible capitalism" as the
bigger conglomerates must restrain themselves from swallowing up smaller businesses.
"What is important is what we do in volatile and
uncertain times, and companies need to transform themselves more effectively
and timely using these cross-border M&A's if they want to continue."