The likelihood is increasing that ING Life Korea’s new owner will be decided within the week.

According to industry resources on Sunday, ING Group will open a board meeting at its Netherlands headquarters within the week to decide on the preferred bidder of ING Life Asia-Pacific. Whether ING Life Korea will be sold separately or together with the insurance firm’s Southeast Asian arm is also likely to be decided at the meeting.

KB Financial and AIA Life Insurance jumped into the bidding to take over ING Life Korea, while AIA and Korea Life Insurance, a unit of Hanwha Group, are vying for the Southeast Asian office.

Analysts noted that if the insurance firm decides to sell both the Korean and Southeast Asian arms, AIA, which is contending for both, is likely to be chosen as the preferred bidder. Korea Life Insurance is virtually elbowed out from the competition as Hanwha Group chairman Kim Seung-youn was sentenced to four year’s imprisonment for embezzlement and breach of trust, they said.

However, banking sources said KB Financial Group chairman Euh Yoon-dae also seems determined to strengthen its competitiveness by merging with an insurance company especially after it decided against taking part in the preliminary bidding for Woori Finance.

Analysts said that if KB Financial were to take over ING’s Korean arm, the lender would be able to use its 1,160 local branches to handle ING Life’s non-banking businesses such as bancassurance. KB’s insurance sector would then be among the “Big 4” in the local market along with Samsung Life Insurance, Korea Life Insurance and Kyobo Life Insurance.

An apparent hurdle for the bid for ING is its labor union strike that commenced on July 31. The union is going on an indefinite strike against ING over its members’ job security. Insiders point out that ING would have to bear some losses if the strike continues.

ING Korea recently offered to the union an offer where it would not lay off employees for the next two years and would provide special bonuses to some. The union, however, turned down the offer because the company added a condition that “if the situation is inevitable, there could be some lay-offs.”

“If the management is to pack up only their profits and leave, we are going to proceed with firm countermeasures as well so that a new owner cannot so easily come as it wishes,” said Lee Ki-cheol, head of the union.

ING Life Korea is the fourth-largest life insurance firm in the country by market share, and is worth around 3.5 trillion won ($3.04 billion).

By Park Min-young  (claire@heraldcorp.com)