This article was published on May 21, 2025, at 11:25 a.m. on the ChosunBiz MoneyMove (MM) site.
Yuanta Securities Korea's special purpose acquisition company (SPAC) merger success rate is the lowest among major securities firms. Although Yuanta Securities Korea does not have a prominent presence in the corporate finance market, it has led the 'SPAC boom' by listing several SPACs in recent years.
Yuanta Securities Korea noted earlier this year that it would leverage its strength in SPAC mergers to expand its underwriting contracts for small and medium-sized corporations' initial public offerings (IPOs), but its performance has not met expectations. Concerns have been raised that frequent personnel movements have weakened the competitive edge of the relevant departments, resulting in a decrease in SPAC success rates.
According to the Korea Exchange on the 21st, among the top 10 securities firms that have acted as underwriters for SPACs in the last three years (from May 20, 2022, to May 20, 2025), Yuanta Securities Korea has newly listed eight SPACs, from the 10th to the 17th. In terms of new listings alone, it ranked jointly third with NH Investment & Securities. However, there were only two successful mergers during this period. The merger success rate for SPACs, relative to new listings, is the lowest among the 10 securities firms at 25%.
The top 10 securities firms have listed 69 SPACs in the last three years, accounting for 70% of the total listed SPACs (98). Successful mergers accounted for a significant portion as well, with 10 firms completing 38 mergers out of 54 total (70%). However, Yuanta Securities Korea's success rate is one in four, significantly below the average merger success rate of 55.9% among the 10 firms.
A SPAC is a nominal company established solely for the purpose of acquiring and merging corporations. It must merge with a private company within three years of its listing, and if it fails to find a merger target, it undergoes a liquidation process and is delisted.
Yuanta Securities Korea has actively increased its presence in the SPAC market. It is a mid-sized securities firm with over 1 trillion won in equity, looking to supplement its weak competitiveness in the IPO sector with SPACs.
However, Yuanta Securities Korea's competitiveness in the SPAC market was limited. The competition among securities firms acting as sponsors for mergers became fierce as SPACs gained popularity.
Yuanta Securities Korea has also struggled with organizational management. An official from a securities firm stated, “Yuanta Securities Korea has seen frequent personnel movement recently,” adding that “to increase the success rate of SPACs or direct listings, it is crucial to maintain long-term, steady relationships with private companies, and Yuanta’s competitive edge appears to have weakened in this regard, leading to a low SPAC success rate.”
There is also the impact of a slight cooling of the SPAC market. After a significant listing of 45 SPACs in 2022, 37 and 40 entered the stock market in 2023 and last year, respectively.
This is due to the increasingly stringent scrutiny of SPACs. The performance of companies that went public through SPACs has fallen short of expectations, leading to concerns over their overvaluation. According to Hanwha Investment & Securities, 60% of the companies that went public through SPAC mergers in 2021 had actual performances below their estimated revenues, and this proportion rose to 82% last year.
As a result, financial authorities have strengthened listing reviews, diminishing the advantages of SPACs, which had relatively low listing hurdles. This year, only two SPACs, Yuanta 17 Special Purpose Acquisition Company and Hanwha Plus No 5 Special Purpose Acquisition Company, have been newly listed.
Yuanta Securities Korea plans to enhance its competitiveness in SPAC listings again. The company stated, “We are continuously seeking merger targets for SPAC listings and are also preparing for mergers.”
Yuanta Securities Korea has appointed Lee Yeon-dae, former executive director of KB Securities, to head the corporate finance division, which had been vacant at the beginning of the year. The company plans to strengthen its equity capital markets (ECM) and mezzanine sectors with the new leadership.