South Korea-based Shinhan Financial Group Co. Ltd. and KB Financial Group Inc. expressed interest in acquiring ING Life Insurance Korea Ltd., The Korea Times reported March 27, citing "sources familiar with the issue."
Shinhan Financial unit Shinhan Bank Co. Ltd. is looking to acquire ING Life for 2.5 trillion won including the management premium, a source in the local private equity fund industry said. The group is currently in the process of studying and analyzing the insurer's market valuation, the source noted, adding that the deal would help Shinhan Financial expand its business portfolio to nonbanking.
The group is also mulling a partnership with strategic financial investors to reduce the financial burden for what officials consider as a "mega-sized acquisition."
Meanwhile, rival KB Financial is looking to purchase ING Life to solidify its position as the country's leading bank, two sources from the industry said. A source added that KB Financial has a relatively weak portfolio in nonbanking, particularly life insurance.
Local private equity firm MBK Partners Ltd., which had acquired ING Life from ING Groep NV for about 1.8 trillion won, has been looking to sell the insurer since 2016. KB Financial had ruled out bidding for ING Life as it did not have enough capacity to pursue another acquisition at that time.
Shortly, MBK Partners suspended plans to sell the insurer due to its Chinese suitors' reluctance to proceed with their bids amid political tensions between the two countries.
Following the suspension of the planned sale, ING Life filed an IPO application with the Korea Exchange in early 2017. The insurer later priced the IPO at 33,000 won per share, which was at the lower end of its indicative price range of 31,500 won to 40,000 won per share. The offering was expected to fetch 1.1 trillion won. Samsung Securities and Morgan Stanley were tapped to act as advisers for MBK Partners.
As of March 27, US$1 was equivalent to 1,072.83 South Korean won.