The Korea Fair Trade Commission (the "KFTC") issued a public notice on a proposed amendment to its Merger Review Guidelines ("Proposed Amended Guidelines") to expand the scope of business combinations eligible for the KFTC's simplified review, which subjects merger filings to an expedited review process when it is clear that the transaction would have no impact on the domestic market.  In particular, under the Proposed Amended Guidelines, the following transactions will be newly subject to simplified review.
 

• All types of reportable foreign-to-foreign transactions that would have no impact on the domestic market (amended clause)

Currently, even if a transaction is a foreign-to-foreign transaction and would have no impact on the domestic market, only those transactions that are carried out in the form of a "joint participation in the establishment of a new company", i.e., formation of a joint venture (JV) or formation of a de facto JV through share acquisition are subject to the KFTC's simplified review.  Accordingly, it has been difficult for foreign companies pursuing business combinations that would have no impact on the domestic market to file for simplified review when the business combination did not occur in the form of a JV formation or de facto JV formation. 
The Proposed Amended Guidelines eliminates the limitation to JV and de facto JV formations, so that all five types of reportable transactions (including, share acquisitions, mergers, interlocking directorates, and business transfers) will be subject to the KFTC's simplified review if they are foreign-to-foreign transactions and have no potential impact on the domestic market.
 

• Business combinations undertaken by a real estate investment company for the purpose of acquiring real estate, etc. (newly added clause)

Under the Proposed Amended Guidelines, when a real estate investment company (as defined by Article 2(1) of the Real Estate Investment Company Act) pursues a business combination to invest in or operate a real estate, etc., within its scope of business, the transaction will be subject to the KFTC's simplified review if it is evident that the transaction is a mere investment activity and not pursued for business management purposes.
 

It is noteworthy that the Proposed Amended Guidelines will enable parties to request for simplified review when filing business combinations between foreign companies, regardless of the type of transaction, as long as it is evident that the transaction would have no impact on the domestic market.  We understand that this amendment reasonably addresses the current confusion over whether companies can file for simplified review even when it is evident that the transaction would have no impact on the domestic market.  Going forward, we expect that a greater number of reportable business combinations between foreign companies will be able to more swiftly obtain clearance from the KFTC.