What it is
In a merger one company absorbs another, and shareholders of the disappearing company receive new shares of the surviving company at the merger ratio. In a spin-off (split) part of a business is separated into a new company.
Two kinds of split in Korea
In a pro-rata split (인적분할) existing shareholders receive shares of the new company in proportion to their holdings. In a subsidiary split (물적분할) the parent keeps 100% of the new company and shareholders receive nothing directly. Because later listing such subsidiaries has been criticized for diluting parent shareholders, dissenting shareholders of listed companies now get appraisal rights for subsidiary splits too.
Filings and what to check
Look for material event reports titled merger decision, split decision or split-merger decision. Check the ratio, effective date, listing date of new shares, the price and window for appraisal rights (dissenting shareholders asking the company to buy their shares), and any trading halt during the process. Shareholder meetings can reject the plan and deals are sometimes withdrawn.
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This explanation is general information, not investment advice. Rules reflect September 2026 and may change; check official exchange and broker notices.