BofA emerges as top dealmaker of S.Korea's mega M&As

Bank of America Merrill Lynch (BofA) has emerged as the top M&A dealmaker in South Korea this year, working on a combined 8 trillion won ($7 billion) worth of domestic buyout deals.

The US investment bank has handled almost all high-profile M&A transactions sealed in the country, since its South Korea investment banking head Cho Chanhee took the helm in March of this year.

BofA seemed to have brought down Credit Suisse (CS) from the top spot of the country's M&A advisory league table. CS had ranked the top M&A dealmaker in South Korea over the past three years, trailed by Citigroup, Deutsche Bank and BofA. In 2020, BofA ranked fourth.

Among the major deals advised by BofA were MBK Partners' 2.5 trillion won sale of Doosan Machine Tools Co. and Bain Capital's 1.7 trillion won exit from South Korea's top botox maker Hugel Inc. earlier this month.

Back in 2016 and 2017, Cho at BofA had worked on the buyer's side for MBK and Bain to acquire Doosan Machine and Hugel, respectively.  

He also spearheaded the 2.1 trillion won sale of a 50.75% stake in Daewoo Engineering & Construction Co. by KDB Investment to the builder's smaller rival Jungheung Construction Co. this month.

Despite unfavorable market conditions for Doosan Machine and Daewoo Engineering during the prolonged pandemic situation, both companies in traditional businesses succeeded in fetching higher-than-expected valuations.

BofA fueled interest in the companies put back on the market in several years for the lucrative exits for the sellers. 

On the buyer's side, it advised Lotte Group and CVC Capital, which had been touted as strong candidates each for eBay Korea and JobKorea, the country's top recruitment portal, through the final round of their bidding process.

FUNDRAISING DEALS

The investment bank was also active in arranging pre-IPO fundraising for fintech startups. 

It was in charge of the 1.2 trillion won fundraising in May by South Korea’s first internet-only bank, K Bank. The fundraising amount was twice as much as the banking platform's original target.

BofA worked for Viva Republica Inc., the operator of Korea's popular digital wallet Toss, to raise 460 billion won in July. The funds were raised at a valuation of around $7.4 billion, a sevenfold increase compared to its valuation from three years ago.

Currently, it is managing SK E&S Co.'s sale of new preferred shares to raise about 2 trillion won and the sale of Daekyoung Oil &Transportation Co., which produces and trades animal oil and fats used in the feed, biodiesel and chemical industries. 

"Networking is key to the success of investment banking," an IB source told Market Insight. "Cho's network played a key role in closing the M&S deals and attracting investment to those companies."

Cho, 44, is now the youngest head among global investment banks operating in the country. In 2018, he was promoted to managing director.

With a bachelor's degree from Seoul National University's college of business administration, he received an MBA from the Wharton School. Prior to joining BofA in 2011, he had worked at Citigroup and a global private equity firm.

Meanwhile, Credit Suisse topped the IPO underwriters table in South Korea this month. It is estimated to receive more than 15 billion won in IPO fees in August alone, accounting for one-fifth of the fees paid to the underwriters of the country's four big IPOs this month, including KakaoBank Corp. and Krafton Inc. 

Write to Chae-yeon Kim at why29@hankyung.com
Yeonhee Kim edited this article.