This paper analyzes the effect of credit ratings in the Korean acquisition and merger(M&A) market. Credit ratings can be used as a measure of financial constraint and credit rating agencies deliver the credit information of firms in debt market. So the credit ratings play the role in the reduction of information asymmetry between manager and outside investors (or manager of different firms). The result of our logistic regression shows that rated firms are more likely to be acquirers, and rated, speculative rating, lower credit rating level firms are more likely to be target companies. Also targets’ credit ratings affect the completion of M&A activity. This supports our hypothesis that credit rating affects M&A activity through financial constraint and information asymmetry problem chanel. Also we find a curvilinear relationship between the credit rate level and the likelihood of acquirer. In very high credit level (AAA ~ A), the relationship is positive but this relationship is negative in downside of BBB grade. Collectively, these findings suggest that credit ratings has a distinct effect on investment decisions(M&A).