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More Korean and foreign firms join bid for ING Life
By Korea HeraldPublished : May 23, 2012 - 20:04
KB Financial Group, Korea Life Insurance and several foreign bidders, including Hong Kong’s AIA Group, have jumped into the contest to acquire ING Group’s Asian insurance business.
Samsung Life, Prudential and Kyobo Life, which had previously expressed interest in ING Life, did not submit letters of intent in the preliminary bid last week.
Analysts expect the price tag for the Netherlands-based financial group’s Asia-Pacific operations to rise above $7 billion, which would make it the largest-ever insurance industry transaction of its kind in Asia.
KB Financial bid on just the Korean life insurance operations, and is anticipated to be the most likely winner if ING decides to sell its Korean unit separately. The assets of ING Life’s Korean arm are valued at 20.8 trillion won ($17.8 billion).
ING is currently the third-largest shareholder of KB Financial with a 5.02 percent stake. Therefore, if ING sells its Korean unit to KB Financial and causes KB Financial shares to rise, it will allow ING to maximize returns from its investment.
“If KB Financial acquires ING Life’s Korean unit, its return on equity will rise by over 0.7 percentage point and cause share prices to surge,” said Choi Jin-seok, an analyst at Woori Investment and Securities Co.
“If ING Group plans to sell off its stake in KB Financial within the next two years, selling its Korean operations to KB Financial would help it maximize returns.”
ING Group has yet to decide whether to sell its insurance arms in China, India, Japan, Korea, Thailand, Malaysia and Hong Kong separately or altogether.
The foreign bidders reportedly prefer an en bloc sale.
MetLife Inc. of the U.S. and Canada’s Manulife Financial Corp. are also bidding in the ING auction.
Among the foreign bidders, AIA Life is perceived as the most competitive.
With some $4.3 billion in cash on hand, AIA is believed to have enough funds to buy the entire Asia Pacific operations of ING Life.
ING Life plans to shortlist the preferred candidates within this month and go ahead with the final bidding process next month.
By Kim So-hyun (sophie@heraldcorp.com)
Samsung Life, Prudential and Kyobo Life, which had previously expressed interest in ING Life, did not submit letters of intent in the preliminary bid last week.
Analysts expect the price tag for the Netherlands-based financial group’s Asia-Pacific operations to rise above $7 billion, which would make it the largest-ever insurance industry transaction of its kind in Asia.
KB Financial bid on just the Korean life insurance operations, and is anticipated to be the most likely winner if ING decides to sell its Korean unit separately. The assets of ING Life’s Korean arm are valued at 20.8 trillion won ($17.8 billion).
ING is currently the third-largest shareholder of KB Financial with a 5.02 percent stake. Therefore, if ING sells its Korean unit to KB Financial and causes KB Financial shares to rise, it will allow ING to maximize returns from its investment.
“If KB Financial acquires ING Life’s Korean unit, its return on equity will rise by over 0.7 percentage point and cause share prices to surge,” said Choi Jin-seok, an analyst at Woori Investment and Securities Co.
“If ING Group plans to sell off its stake in KB Financial within the next two years, selling its Korean operations to KB Financial would help it maximize returns.”
ING Group has yet to decide whether to sell its insurance arms in China, India, Japan, Korea, Thailand, Malaysia and Hong Kong separately or altogether.
The foreign bidders reportedly prefer an en bloc sale.
MetLife Inc. of the U.S. and Canada’s Manulife Financial Corp. are also bidding in the ING auction.
Among the foreign bidders, AIA Life is perceived as the most competitive.
With some $4.3 billion in cash on hand, AIA is believed to have enough funds to buy the entire Asia Pacific operations of ING Life.
ING Life plans to shortlist the preferred candidates within this month and go ahead with the final bidding process next month.
By Kim So-hyun (sophie@heraldcorp.com)
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Articles by Korea Herald
