The sale of Prudential of Korea marks the exit of the US insurance group from the South Korean market
KB Financial Group has reportedly secured approval from the South Korean Financial Services Commission for its previously announced KRW2.3trillion ($1.9bn) acquisition of Prudential Life Insurance of Korea (Prudential of Korea).
Upon closing of the deal, Prudential of Korea will become the 13th subsidiary of the South Korean financial group, reported The Korea Herald.
The company being acquired is currently the Korean life insurance subsidiary of US insurance major Prudential Financial.
The transaction, which was announced in April 2020, is slated to be closed by the year-end upon securing all the regulatory approvals and meeting other customary closing conditions.
The Prudential Financial subsidiary has been operating since 1989. The company, through its Life Planner business and general agency channel, is engaged in offering life insurance and other protection products.
The sale of the Korean life insurance subsidiary by Prudential Financial is said to align with its strategic focus internationally on Japan and emerging markets across the globe which have higher-growth.
Furthermore, the sale of the subsidiary marks the exit of the US insurance group from the South Korean market following almost three decades of operations in the Asian country.
Prudential Financial at the time of signing the deal said that it expects to use the proceeds for general corporate purposes.
Prudential of Korea to strengthen KB Financial’s non-banking business
KB Financial Group is acquiring Prudential of Korea in order to strengthen its non-banking business. This, in turn, is expected to diversify the Korean financial services provider’s revenue stream, beyond KB Kookmin Bank, the company’s primary subsidiary, as per The Korea Herald.
The life insurance business to be acquired by KB Financial Group will function as a standalone entity for some time to boost business stability while pursuing synergy with other subsidiaries and affiliates.
A company official has been quoted by the publication as saying: “With the latest acquisition, KB will try to offer a range of quality financial services for customers.”