The prospective deal appears to be part of the US insurer's effort to shed overseas assets, and manage risk
Prudential Financial is in talks with KB Financial to sell its South Korean brokerage arm, a deal which could fetch an estimated $680 million – reported Reuters.
The prospective deal appears to be part of the US insurer’s effort to shed overseas assets, and manage risk. It stated that Prudential has picked Deutsche Bank as a lead manager.
KB, the parent company of South Korean bank Kookmin, is set to raise 1 trillion won ($809 million) in a rights offering. The proceeds will be used to buy a securities house or insurance company to beef up the group’s non-banking operations.
Prudential bought unlisted Prudential Investment & Securities in 2004. The brokerage swung to an 11 billion won loss in fiscal 2008, due to a sharp drop in stock markets.
Applying the current valuation of two times estimated book for South Korean brokerages, the possible sale would be worth 840 billion won ($680 million), based on the unit’s net asset price of 420 billion won at the end of July – as quoted in Reuters.