South Korean financial regulators have granted permission to Seoul-based private equity firm MBK Partners for its proposed acquisition of ING local insurance business.
Following the completion of the proposed KRW1.84trn ($1.75bn) deal, which was originally signed in late August, MBK will be able to take full control of the Korean operation, reported Reuters.
However, the Amsterdam-based the financial firm will retain an indirect stake of about 10% in ING Life Korea by participating in the special purpose company.
Netherlands-based financial conglomerate has also inked a licensing agreement that will allow ING Life Korea to continue to operate under the same brand for a maximum period of five years.
ING Group CEO Jan Hommen had said that the transaction is a major step in the divestment of its Asian insurance and investment management activities.
"I am convinced that with the support of MBK Partners, ING Life Korea will continue to grow its customer offering and build on its position as the fifth-largest insurance company in the Korean market," Hommen added.
"Through its 10% stake, ING will be able to benefit from that growth potential."
The Amsterdam-based financial organization, which will sustain a €950m losses on the current transaction, said in May that three firms have shown interest to acquire the insurance operation, for which ING launched the sale process 17 months ago.
The three bidders include Kyobo Life Insurance Co, MBK Partners and Vogo Fund, which manages Tongyang Life Insurance Co.
During the financial crisis of 2008, the bank received a state bailout package and agreed with the Dutch government to divest all of its Asian insurance businesses.
Established in 1987, ING Life Korea serves approximately 1.3 million customers, through more than 1,000 staff and nearly 6,800 tied agents.
Image: ING House, ING headquarters in Amsterdam. Photo courtesy of Mig de Jong.