The upcoming sale of Woori Investment & Securities Co could trigger consolidation among the local securities companies in South Korea, paving the way for the government to establish "the Goldman Sachs of Korea," Bloomberg reported. Today is the deadline for final offers of the $722 million stake held by Woori Finance Holdings in its brokerage unit.

South Korean financial regulator, the Financial Services Commission or FSC, had earlier said that it would promote consolidation by giving permission to brokerages to enter into new businesses after acquisitions are made, the report said. These changes signify South Korea's plan to reform its securities industry so that it would be able to establish an investment bank that is large enough to be globally competitive.

The promise to create "the Goldman Sachs of Korea" was given by the regulator two years ago. In October, the FSC also started to give licenses to some companies permitting them to provide corporate clients with such services as prime brokerage, margin financing and bridge loans in a bid to make the domestic securities firm more sophisticated, the report said.

Soongsil University Business Administration Professor Jang Beom Sik was quoted as saying in the report, "Size does matter for the South Korean brokerage industry. We simply have too many too small brokerages that can't compete in the global market. The Woori Investment acquisition will be a trigger for much-needed industry consolidation."

The distressed asset trading unit and leasing firm of Woori Finance are being disposed of separately in a fourth attempt by the government to get back taxpayers' money after it rescued the company over a decade ago.

FSC Chairman Shin Je said on December 9 that any consolidation to happen in the industry will not happen right away. The report quoted him as saying, "Creating the Goldman Sachs of Korea is the eventual goal, though I also know we need to proceed step by step. The sale of Woori Investment will be the starting point for industry reforms."