Fair trade watchdog approves KORAIL's takeover of SR

South Korea's antitrust watchdog, the Fair Trade Commission (FTC), has approved KORAIL Corp.'s acquisition of SR Corp., deeming the deal unlikely to stifle competition in the transportation sector. The FTC emphasized that KORAIL, as a state-run company subject to government scrutiny, is unlikely to abuse its market position or harm consumers.

KORAIL, primarily operating out of Seoul Station, is a government-controlled railway operator, while SR holds a 58.95% stake, with KORAIL owning the remaining shares. SR is responsible for the Super Rapid Train (SRT), which departs from Suseo Station in southern Seoul.

The FTC highlighted that the high-speed rail industry is heavily regulated by the Railroad Service Act and related laws, noting KORAIL's commitment to public interest. The watchdog also pointed out that ticket fares are capped by the transport and finance ministries, which prevent KORAIL from unilaterally raising prices. Additionally, KORAIL cannot reduce seat availability, decrease service frequency, or alter service routes without approval from the land minister.

To ensure ongoing oversight, the FTC and the land ministry signed a memorandum of understanding on the same day, committing to monitoring KORAIL's business operations post-acquisition. The takeover is projected to be finalized in September.