Tong Yang Life Insurance to come back on market in 3 years…ING Life Insurance to be on sale in complex
Cho Eun Guk | ceg4204@ | 2018-05-10 10:22:03

As Tong Yang Life Insurance is expected to be acquired as a merger and acquisition (M & A) offering and ING Life Insurance is expected to play a major role in the sale.

MBK Partners, the largest shareholder of ING Life Insurance, is planned to be deeply troubled by the possibility of additional listings in the M & A market.

According to the financial sector on May 9, Tong Yang Life Insurance, which has been transferred to China`s Avalanche Insurance, is likely to be sold again to the M & A market in three years.

Tong Yang Life Insurance, on May 8, "We are in the process of analyzing and evaluating all overseas assets of the largest shareholder in the contract management plan of the Chinese government," the company said in a request for disclosure related to the disposal of its largest shareholder.

Tong Yang Life Insurance, in the industry, stated that it did not make a final decision on whether to sell Tong Yang Life Insurance. Choi Chang-min, head of IB business at Kiwoom Securities, mentioned that "I do not know exactly, but there is a story about the Chinese government selling it."

MBK Partners, which was trying to sell ING Life Insurance, was faced with a difficult situation due to the possibility of additional large-scale sales to the insurance industry. The value of ING Life`s 59.15% stake held by MBK Partners is worth KRW 2.1 trillion and considering the management premium, ING Life`s selling price will reach KRW 2.5 trillion. However, financial holding companies say the acquisition price of ING Life is too high. Shinhan Financial Group, which actually carried out the due diligence, also considers the maximum acquisition price to be less than KRW 2 trillion.

Meanwhile, MBK Partners has stated that it will not hurry to sell ING Life as it has recovered most of its acquisition funds through dividends, corporate disclosure, and recap.

But, the rights to use the ING Life brand are terminated this year. The private equity funds are not in a position to spare as much as they should pay investors with high returns.

The current situation is likely to be disadvantageous to MBK Partners, as the possibility of Tong Yang Life Insurance, which is similar to ING Life and asset size, is going up.

"Most Merger & Acquisitions dealers are required to pay the price. Financial holding companies are interested in insurance companies. Financial holding companies can be favored." stated Choi Jang-min, director of IB business.

A senior representative of Shinhan Investment Corporation stated, "Despite Tong Yang Life Insurance was a potential sale, there was no specific review, but it would be possible to review it if it actually comes out in the M & A market." "This is not the end of ING Life`s pricing. We have to negotiate, but the prices are too high." the expert stated.

By Cho Eun Guk ceg4204@

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