South Korea to adopt bear-hug takeover disclosure rule by year-end

In a policy meeting at the National Assembly, the government and the ruling Democratic Party reached consensus to adopt a bear-hug mechanism for unsolicited takeover proposals, with a target implementation before year-end. The plan calls for amending the Capital Market Act so that prospective acquirers must publicly disclose offer details, pressuring target company boards to respond. Rep. Oh Gi-young, chair of the party’s Special Committee on K-Capital Market, pledged to fast-track the legislation and rally support inside and outside the party.

He also reaffirmed the party’s commitment to the Korea Exchange’s “naming and shaming” initiative, which will publish a list of companies with price-to-book ratios below 1 on Nov. 2, addressing the fact that 60-70 % of Korean firms fall into that category. Officials argue that greater disclosure will help investors make informed decisions and improve overall market efficiency. The combined measures are intended to revitalize South Korea’s capital market and encourage companies to raise their valuations.