‘Still too soon to open M&A exchange in Korea’

Science, ICT and Future Planning Minister Choi Mun-kee expressed skepticism about the possibility of an early opening of the so-called M&A exchange for start-ups and small and medium companies in the country.

“I am well aware of the importance of the M&A market, but it is too early to set up an M&A exchange in Korea,” Choi said in an exclusive interview with The Korea Herald.

“The local M&A market appears to be not yet mature enough to accommodate such an exchange. Confidentiality and reliability are critical conditions for M&A transactions, so we need to be very careful about introducing such an exchange,” he said.

“For now, the M&A Info-Market that offers sales information for M&A brokers is an alternative,” he added.

M&As are critical in activating venture start-ups, as witnessed in Silicon Valley where those business deals have been one of the major driving forces behind them.

Industry watchers have often pointed out that the active M&A ecosystem is what makes the difference between Korean firms and those in the U.S.

Internet giant Google acquired more than 120 start-ups while the leading local Internet portal Naver bought up just over 10 during the past decade, according to market reports.

In recent years, calls for an exchange for trading companies available for M&As have been on the rise.

Mentioning the entrepreneurship programs that run at MIT in Boston, where he visited in August, Choi also emphasized the need for collaboration among industries, academia and government to vitalize creation.

“MIT’s support and training for venture start-ups was most impressive. It was based on the passion of students whose ideas were commercialized, thanks to mentoring services,” he said.

In one of MIT’s start-up support programs, a group of 400 mentor volunteers including corporate executives provides help with technology, investment and marketing.

Choi cited Techstars, a seed funding provider, as a model example of the mentoring program.

The U.S. startup accelerator offers a venue for up to 90 days for promising start-ups, also providing them with training and consulting. Techstars then takes a 6 percent stake.

The ministry is currently looking for ways to apply these methods in Korea.

As for the new start-up support center, which is scheduled to be built in November, the minister said it would most likely be a type of networking hub for Koreans and Korean-Americans seeking to start their own business. The ties between KAIST and MIT may be utilized in the process.

By Kim Ji-hyun and Kim Young-won

(jemmie@heraldcorp.com) (wone0102@heraldcorp.com)