K-Beauty Salons' Global Expansion: A New Signal for Export Strategy

Global private equity firm Blackstone's acquisition of domestic hair salon chain Juno Hair last year has drawn attention to new possibilities for Korea's service industry. Kim Yi-dong, head of the Deal Advisory division at Samjong KPMG, evaluated the deal as "a case where Juno Hair's sale was recognized for the possibility that Korean companies' 'systems' can expand overseas."

This transaction goes beyond a simple corporate sale, serving as a symbolic event showing that Korean companies' competitiveness is expanding from manufacturing to the service sector. As the influence of K-content extends beyond movies and dramas to lifestyle-oriented service areas such as beauty and cosmetics, global investors have begun to take interest in Korean products and services as a whole.

150 Trillion Won National Growth Fund: A Catalyst for M&A Market Activation

Kim cited the National Growth Fund and internationalization as key keywords for Korea's M&A market in 2026. As the government's 150 trillion won National Growth Fund, which will be invested in high-tech strategic industries such as AI, semiconductors, bio, secondary batteries, and future vehicles over the next five years, begins full-scale operation, M&A activities and overseas expansion of ecosystem companies are expected to become more active.

"We are looking forward to this year's M&A market. As 150 trillion won is invested in future growth sectors, M&A of ecosystem companies, overseas expansion, and joint venture establishments will become more active," he emphasized, adding that "companies must construct and execute persuasive logic that they contribute to the national economy based on investment funds."

Korea's M&A market has been in a slump since peaking in 2021. In this situation, large-scale government investment is expected to serve as a catalyst to inject vitality into the market.

Expected Increase in Cross-Border Deals with Japan

Along with improvements in the domestic investment environment, cross-border M&A transactions are also expected to expand. Deals with Japan are particularly drawing attention. Kim noted, "Japan's M&A market has recently been activated. Japan has many companies with source technologies and precision manufacturing capabilities that Korean companies desire," forecasting that bilateral cooperation attempts will lead to M&A activation.

Japanese companies are also actively seeking cooperation to establish a foundation for supplying to Korea's semiconductor and automotive conglomerates, suggesting a high possibility of forming mutually complementary relationships.

Accelerating Portfolio Restructuring Among Large Corporations

Kim forecasted that the trend of business reorganization and carve-outs (business division spin-offs) among large corporations will continue this year. "Portfolio restructuring seems to become a 'routine' management activity. The Trump administration's tariff issues and pressure for U.S. investment were unpredictable," he emphasized, noting that constant business evaluation, sales, and new investments are necessary to respond to rapidly changing circumstances.

Specifically, he expects companies to sell underperforming business units in petrochemicals, steel, distribution, construction, and some consumer goods industries, and invest the secured resources in semiconductors, AI, healthcare, power infrastructure, defense industry, senior industry, and K-content.

Samjong KPMG Innovates Operations with AI Platform

Samjong KPMG introduced AI-based platform 'Deal Mind' in July last year as the first in the industry. This platform integrates and manages information collected by domestic and international partners to identify acquisition and sale opportunities, dramatically reducing the time required for potential investor listing work.

Expectations are particularly high for the Carve-out TF (Task Force). Kim explained, "When a place that was a business unit of one company becomes 'independent,' opportunities and problems arise simultaneously," noting that advisory activities are needed to estimate costs that can be reduced through separation, new customers, IT service transfers, and personnel redeployment.

Responding to Strengthened Private Equity Regulations with ESG Due Diligence

On December 22 last year, the Financial Services Commission announced private equity fund (PEF) improvement measures, outlining the contours of regulatory strengthening. Measures to establish governance and internal controls at the level of financial companies are expected to be required to strengthen the responsibility and transparency of general partners (GPs).

Kim emphasized the need to accept the expanding concept of 'stakeholders' surrounding private equity funds. "The scope of consideration surrounding private equity funds is getting broader. Industry stakeholders must also accept this and form some degree of consensus," he said, noting the need to move away from viewing private equity funds only as private contracts between GPs and limited partners (LPs).

As a countermeasure, the importance of introducing Environmental, Social, and Governance (ESG) due diligence is being highlighted. Non-financial risks such as ESG should be examined during the M&A due diligence stage to consider more stakeholders. Kim forecasted, "The scope of due diligence should include the impact on expanded stakeholders and coordination should be made within a socially acceptable range."

While regulatory strengthening may act as a burden on the market in the short term, it is expected to contribute to enhancing transparency and establishing a foundation for sustainable growth in the long term.