The five biggest industrial conglomerates in South Korea have agreed to sell off or transfer nearly half their subsidiary companies as part of a forced efficiency drive.

The deal follows months of pressure from the South Korean government and the international financial community, who view restructuring of the industrial groups, known as chaebol, as vital to South Korea's economic recovery.

The deal prompted a surge in share prices on the South Korean stock exchange, but a BBC correspondent says the agreement is being seen as only the first step in a long and painful process of reform.