Chinese Bidders Expected in Upcoming Sale of ING Life Korea
27 April 2016 - 4:30AM
Dow Jones News
Asian private-equity firm MBK Partners LP is kicking off the
sale of one of South Korea's largest life insurers in a deal that
could fetch more than $3 billion, according to people familiar with
the situation.
MBK has hired Morgan Stanley to shop its stake in ING Life
Korea, South Korea's fifth-largest insurance company by assets,
with financial information set to go out to potential bidders this
week, the people said.
The sale process is expected to generate interest from a mix of
Chinese and South Korean insurance companies, they said. Potential
bidders could include South Korea's No. 2 and No. 3 players, Hanwha
Life Insurance Co. and Kyobo Life Insurance Co., as well as China's
Ping An Insurance (Group) Co., according to the people. could reap
a tidy profit on the sale of ING Life Korea after buying it from
the Dutch parent company in 2013 for $1.6 billion.
Chinese buyers, led by Beijing-based insurer Anbang Insurance
Group Co., have shown interest in tapping the South Korean market
at a time when some Western insurers are selling out. Anbang
purchased the South Korean operations of Germany's Allianz SE
earlier this month for about $3 million and won control of South
Korea's No. 8 insurer Tong Yang Life Insurance Co. last February
for $1 billion.
Beijing-based Anbang turned heads last month when it offered $14
billion for Starwood Hotels & Resorts Worldwide Inc., before
abruptly dropping the bid. Anbang, founded in 2004, paid nearly $2
billion in October 2014 for the Waldorf Astoria hotel in
Manhattan.
ING Life Korea, which has about 30 trillion Korean won ($2.6
billion) in assets, would be a richer prize than Tong Yang or
Allianz's Korean life insurance business, offering a book value of
about 4.3 trillion won ($3.7 billion) and, for Chinese insurers,
exposure to the relatively complex insurance products that ING
sells in South Korea. ING Life Korea's net income rose 36% last
year to 305 billion won.
MBK is seeking to have letters of intent from bidders by the end
of May, according to the people.
The Asian private-equity firm acquired ING Groep NV's South
Korean unit in 2013 as part of a planned shrinking of the
Amsterdam-based financial giant ordered by the European Commission
after ING was rescued with a €10 billion ($11.3 billion) bailout in
2008. ING retained a 10% stake in the South Korea operation after
the 2013 sale.
MBK, which invests in South Korea, Greater China and Japan, was
set up in 2005 by a team of former executives from Carlyle Group LP
led by Michael Kim, who previously directed the U.S. buyout giant's
private-equity activities in the Asia-Pacific region. MBK, which
has $10.1 billion of capital under management, is currently in
talks with investors about raising up to $4 billion for a new
buyout fund, The Wall Street Journal previously reported.
Last September, MBK led a consortium of investors that included
the Canada Pension Plan Investment Board and Singapore state
investment firm Temasek Holdings Pte. Ltd. to acquire British
supermarket chain Tesco PLC's South Korea business, known as
HomePlus, for $6.1 billion.
Write to Jonathan Cheng at jonathan.cheng@wsj.com and Alec
Macfarlane at Alec.Macfarlane@wsj.com
(END) Dow Jones Newswires
April 26, 2016 22:15 ET (02:15 GMT)
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