The Korea Fair Trade Commission (KFTC) has issued the advance notice of the proposed amendment to the Notification Guidelines for Business Combinations (Notification Guidelines) for public comment from September 9, 2026 to September 30, 2026.
The amendment to the Notification Guidelines has been proposed to clarify that acquihires, which are transactions becoming more common in emerging high-tech sectors (e.g., AI), may be subject to mandatory merger review and reporting obligations.
Acquihires refer to transactions that utilize hiring arrangements and related agreements to transfer personnel in lieu of executing a formal business transfer agreement. Acquihire transactions have received significant attention by regulators due to large global tech companies’ execution of this transaction structure to systematically recruit key personnel while bypassing merger review.
Because acquihire transactions may constitute a business transfer under the Monopoly Regulation and Fair Trade Act (MRFTA)—one of five types of regulated business combinations—the KFTC is seeking to amend the Notification Guidelines so that acquihire transactions clearly fall under the scope of a business combination subject to notification as a type of business transfer. Under the MRFTA, the transfer or lease of an entire or material part of a business is subject to merger notification if the transaction parties meet the relevant size thresholds or the transaction value exceeds a certain amount with the target entity having substantial activities in Korea.
The KFTC will collect public comments during the period of the advance notice and proceed with implementation of the proposed amendment following deliberation and plenary session resolution.
Contents
- I. Key Contents of the Proposed Amendment
- II. Implications of Proposed Amendment
I. Key Contents of the Proposed Amendment
A. Clarification of “business” to capture organized personnel
The current Notification Guidelines define “business” under Article 9(1)(iv) of the MRFTA (Restriction on Business Combinations) as a bundle of property rights organized for the company’s business purpose functioning as an integrated operational unit, including sales rights, distribution systems, intellectual property rights such as patents and trademarks, and other items of economic value such as government permits and licenses. The proposed amendment to the Notification Guidelines specifies that when personnel organized into a functioning unit, combined with their technology or knowledge, perform a core business function, such personnel fall under the definition of “business.”
B. New standards for “material part” of business and calculating transfer price in acquihires
The current Notification Guidelines provide that a “material part” of a business exists when (i) the part to be transferred or leased is capable of being operated as an independent business unit, or the transfer or lease causes a material decrease in the transferor’s sales, and (ii) the transfer price is at least 10% of the transferor’s total assets as of the end of the immediately preceding fiscal year, or at least KRW 10 billion.
The proposed amendment to the Notification Guidelines expands requirement (i) to include cases when the acquiring company is able to conduct the same business activities as the transferor, to now address acquihire transactions where key personnel (rather than an independently operable business unit) transfer to the acquiring company.
In addition, the proposed amendment to the Notification Guidelines revises how the transfer price is calculated for acquihires. The transfer price will now include any economic consideration (such as money or property benefits) paid to the transferor as consideration for the transaction, regardless of how it has been characterized. Examples include consideration for the release of rights relating to transferred personnel and license fees for intellectual property necessary for business activities.
C. New standard for “implementation” in acquihires
The current Notification Guidelines define the implementation of a business transfer agreement as the completion of final payment. When final payment has not yet been completed, the business transfer is deemed to have been implemented upon delivery of movable assets, registration of real property, or registration of trademarks. The proposed amendment to the Notification Guidelines provides that the cessation of the transferor’s business in the context of an acquihire will also constitute implementation of the business transfer.
II. Implications of Proposed Amendment
In light of the proposed amendment to the Notification Guidelines, companies planning to transfer employees through an acquihire transaction should carefully assess whether the transaction may now trigger a merger notification obligation and factor any resulting notification requirement and review timeline into the transaction schedule.
The KFTC has also stated that the proposed amendment to the Notification Guidelines was developed through the exchange of information with foreign competition authorities, including the EU, Germany and the United Kingdom, and expects further international cooperation and response to new types of business combinations by large global tech companies. Given this exchange, companies planning acquihires should take into account potential coordination between the KFTC and multiple competition authorities during the merger review process.
If you have any questions or require legal assistance on the matters addressed in this newsletter, please contact Lee & Ko's Antitrust & Competition Practice Group.
Authors and relevant professionals :
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Hwan JEONG Partner (
hwan.jeong@leeko.com )
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Jeong-Ho SUN Partner (
jeongho.sun@leeko.com )
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Min-Ho LEE Partner (
minho.lee@leeko.com )
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Suruyn KIM Partner (
suruyn.kim@leeko.com )
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Jungwon KWON Partner (
jungwon.kwon@leeko.com )
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Jeong Yoon CHOI Partner (
jeongyoon.choi@leeko.com )
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In Seon LEE Partner (
inseon.lee@leeko.com )
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Frank S. SHYN Senior Foreign Attorney (
frank.shyn@leeko.com )