Woori to buy life insurers Tongyang and ABL for $1.16bn

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Woori Financial Group, a South Korean financial services provider, has sealed a 1.55trn won ($1.16bn) deal to acquire Tongyang Life Insurance and ABL Life Insurance from China's Dajia Insurance Group.

This move is expected to significantly expand Woori's non-banking business, the Korea Economic Daily reported.

The acquisition was approved by Woori's board and entails a 75.34% stake in Tongyang Life for 1.28trn won and a complete 100% stake in ABL Life for 265.4bn won.

Dajia Insurance, which was set up to take on the operations of the now-defunct Anbang Insurance Group, is planning to exit the Korean insurance market by year-end.

Tongyang Life reported a net profit of 200bn won last year, with assets totalling 33trn won.

Meanwhile, ABL Life recorded an 80bn won net profit for 2023, with 17trn won in assets.

At the end of March this year, the price-to-book ratios for Tongyang and ABL were 0.65 and 0.30, respectively, the report said.

Negotiations for the deal commenced in May, followed by an MOU in June. Woori then proceeded with on-site due diligence.

The integration of Tongyang and ABL into Woori is expected to create synergies with Woori Investment & Securities Co, which was formed by merging Korea Foss Securities with Woori Investment Bank.

Woori Financial Group CEO and Chairman Yim Jong-yong, who assumed leadership in March 2023, has been focused on diversifying the group's revenue streams beyond banking, which currently accounts for around 90% of its profits.

Furthermore, the acquisition is projected to increase the scale of Woori Financial Group’s fund management in collaboration with Woori Asset Management.

Currently, the deal is subject to approval from the Financial Supervisory Service (FSS).

This comes at a time when Woori faces increased scrutiny due to recent findings by the FSS of improper loans made by Woori affiliates to relatives of former chairman Sohn Tae-seung, which is currently under investigation.

"Woori to buy life insurers Tongyang and ABL for $1.16bn " was originally created and published by Life Insurance International, a GlobalData owned brand.


 


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