Yun: Transformation First Step to 'New Beginning'

Young-Gak (Ken) Yun, Chairman and CEO of Samjong KPMG, gives his thoughts on cross-border M&A's for Korean companies at Asia Society Korea Center's monthly luncheon series held at the Lotte Hotel Seoul on April 19, 2011. (Sebastian Strangio)

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 competitive environment.

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."