Korea FSC consultation on Merger Price Calculation Reform

We welcome the opportunity to comment on the amendments announced by the Financial Services Commission (FSC) to the Enforcement Decree (“Decree”) of the Capital Markets Act (“Act”) and the Regulation on Issuance, Public Disclosure, etc. of Securities (“Notification”) published on 15 September 2026.

Norges Bank Investment Management (NBIM) is the investment management division of the Norwegian Central Bank. We manage the Norwegian Government Pension Fund Global. At 30 June 2026, the Fund had USD 2.29 trillion (KRW 3,539 trillion) invested across 67 countries. This includes approximately USD 57 billion (KRW 88 trillion) invested in 420 South Korean listed companies.

As a long-term investor with most of our assets in listed equity, we believe board effectiveness and strong minority shareholder protections impact our long-term returns. When mergers and equivalent reorganisations are conducted at a fair price and treat all shareholders fairly, they support a vibrant market for corporate control. Such a market serves as an external governance mechanism and contributes to well-functioning capital markets. Fair pricing and equal treatment matter most where a controlling shareholder is a party.

Relying on market price alone can understate a company's value, such as the realisable value of its real estate and cross-shareholdings. This can disadvantage minority shareholders. We therefore support the FSC's move to a fair value standard based on market price, asset value and earnings value. We also support the accompanying safeguards: a board opinion, an external evaluation and disclosure of conflicts of interest. This reform is part of the FSC's Capital Market Structural Improvement Plan of 18 March 2026. We have also responded, under that plan, to the Korea Stewardship Code consultation.[1]

The annex sets out our reasons for supporting the reform's key elements and a small number of points on which we would welcome clarification. We would be pleased to discuss any of these points.

Yours sincerely

Carine Smith Ihenacho
Chief Governance and Compliance Officer

Jeanne Stampe                 
Lead Policy Advisor

[1] NBIM Response to Korea Institute of Corporate Governance and Sustainability consultation on Amendment to the Korean Stewardship Code (24 June 2026)