Park Hyeon-joo, the founding chairman of Mirae Asset Financial Group, said Monday the proposed acquisition of Korea’s second-largest brokerage KDB Daewoo Securities will bring his self-built empire one step closer to becoming Asia’s leading investment bank, calling it “a perfect fit” for Mirae Asset.
“The value of Daewoo Securities depends on the synergy it would bring to its proposed buyer. For Mirae Asset, it was deemed a perfect fit -- one that would create synergy of ‘one plus one equals three, four or even five,’” he said.
Mirae Asset’s securities arm has been chosen as the preferred bidder for a controlling 43 percent stake in Daewoo Securities and a 100 percent stake in KDB Asset Management.
The proposed deal, if realized, would create an overwhelming new leader in Korea’s fragmented brokerage sector, with the combined assets of the two entities approaching 8 trillion won ($6.8 billion). The current leader is NH Investment & Securities, with total assets of 4.4 trillion. It would also bolster Mirae Asset group’s total asset past the 10 trillion won mark, which was a goal that Park has laid out in his new-year remarks earlier this year, with a time line of 2020.
“(We) could have spent more (on Daewoo),” Park said, while refusing to disclose the exact amount it offered to pay due to a confidentiality clause. Market sources put Mirae Asset’s bid at 2.4 trillion won, well above the 2.1 trillion won-2.2 trillion won that its competitors had offered to pay.
“We’re capable of spending more,” he added.
A financial investment company’s strength inherently hinges on its asset size, Park continued, saying 10 trillion won does not suffice for his long-term goal of growing Mirae Asset into Asia’s leading investment bank. Mirae Asset will pursue foreign M&As in a mid- to long-term perspective, the chairman went on, saying, “I am still thirsty for deals.”
Park is a legendary figure in Korea’s financial industry, having built Mirae Asset from scratch in the rubble of the Asian financial crisis in 1997 and grown it into a household name in the local retail fund market.
Speaking at his first press conference in almost eight years, the tycoon stressed entrepreneurship to bring about innovation in the financial sector, which he said lacked dynamism.
“The role of financiers in an economy is far bigger than what we, Koreans, tend to think now. It is not just to trade stocks. It is to lead investments (to areas where our future lies),” he said.
Korean entrepreneurs today have become risk-averse and rarely invest in the future, unlike older generations, he continued.
“Risk is not something you avoid. It’s something you manage.”
Park said he wants to make Mirae Asset an investment bank that leads investments in Korea and Asia, saying that there are plenty of opportunities for growth, despite increased global uncertainties.
“The world markets may not be in such good shape and, yes, China’s economy (is a concerning factor). But half of the world’s population is in Asia, and the growth of the Asian middle class is an irreversible trend,” he stressed.
To realize the vision, however, Park may have to clear a local hurdle first -- the governance structure.
A proposed law, currently pending at the National Assembly, would require Mirae Asset Capital, the group’s de facto holding firm 48.69 percent owned by Park, to reduce investments in other companies to below 100 percent of its equity capital. Currently, the firm’s shareholdings in other Mirae Asset units amount to 150 percent of its equity capital.
“We have (sufficient) capital. We just have been saving the bullets for foreign M&As. The proposed change is like forcing us to spend that money on the governance structure. Should that bill become law, we will, of course, comply.”
By Lee Sun-young (email@example.com