South Korea’s leading mobile messenger operator Kakao Corp. and a biopharmaceutical company Celltrion Inc. have been added to the antitrust watchlist as large business groups, which would restrict their mutual investments and loan guarantees, said the Fair Trade Commission (FTC) Sunday.

The antitrust watchdog announced that 65 companies fall under the category of large business groups with assets of 5 trillion won ($4.3 billion) or more as of this April, including six new companies: Kakao, Celltrion, Harim Corp., SH Corp., Korea Investment Holdings Co. and Kumho Petrochemical Co. It excluded Homeplus, a discount store retail chain and Daesung Industrial Corp. in the latest update, raising the total number of conglomerates from 61 to 65 from a year ago.

Under the law, large businesses are restricted in business activities from mutual investments, new cross-shareholdings and loan guarantees to exercise of voting rights for shares of their financial affiliates, to ensure level playing field for Korea Inc.

Kakao, which joined the conglomerate watchlist, has extended its business realm through aggressive mergers and acquisitions (M&As) in the past decade since its first launch as a chat app operator. The startup-turned-conglomerate acquired a leading search engine Daum Communications Corp. in October 2014, increasing its assets tenfold from 217.2 billion won to 2.8 trillion won in two months. It kept growing fast with its assets surpassing 3 trillion won by the end of last year and saw its total assets exceeding 5 trillion won following its buyout of the country’s top music streaming service Melon provider Loen Entertainment Inc. for 1.9 trillion won early this year. Its rival Naver Corp. has higher aggregate market value, but less assets – 4.4 trillion won – falling shy of the 5-trillion-won threshold.

Two other companies – Celltrion, a biopharmaceutical firm and a poultry processor Harim – also joined the list with total assets of 5.9 trillion won and 9.9 trillion won, respectively, according to the FTC.

It also revealed that the 65 conglomerates have 1,736 affiliates, 40 more than last year. Dongbu Group discharged most affiliates, as many as 28 units, in a bid to alleviate financial distress. GS Group and KT Corp. also reduced 10 units each.

By Lee Sang-duk, Na Hyun-joon

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