Seoul: South Korea's antitrust watchdog on Sunday approved the takeover of SR Corp. by Korea Railroad (KORAIL) Corp., saying the deal is unlikely to hinder competition in the transportation industry. The Fair Trade Commission (FTC) stated that as a state-run company subject to government oversight, KORAIL is unlikely to misuse its market position or negatively impact consumers.
According to Yonhap News Agency, KORAIL is a state-run railway operator whose trains primarily depart from Seoul Station. SR is a company where the government holds a 58.95 percent stake, with KORAIL owning the rest. SR operates 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 other related laws, emphasizing that KORAIL serves a public interest. The watchdog also noted that ticket fares are capped by the transport and finance ministries, preventing KORAIL from unilaterally raising fares.
Furthermore, KORAIL is restricted from reducing the number of seats, cutting service frequency, or changing service routes without land minister approval. The FTC and the land ministry also signed a memorandum of understanding to continue monitoring KORAIL's business operations post-takeover.
The takeover is anticipated to be finalized in September.