Shinhan Financial Group has agreed to acquire a 59.15% stake in South Korean insurance company Orange Life Insurance from MBK Partners for KRW2.29tn ($2.06bn).
Shinhan Financial, the parent company of the Shinhan Bank, will acquire a 59.15% stake in Orange Life Insurance. Photo: courtesy of Kaniwari/Wikipedia.org.
As per a regulatory filing, Shinhan Financial has agreed to pay KRW47.4 ($0.042) for each of the 48.5 million shares in Orange Life, which was renamed from ING Life Insurance Korea (ING Life Korea) recently.
The renaming of the Korean insurance company was done in time of the expiry of its contract with ING for the trademark right at the end of 2018.
Orange Life Insurance provides a range of life insurance offerings across the customer lifecycle. Included in these are protection, annuity, variable products and corporate pension through several channels like financial consultant, Bank and GA.
Shinhan Financial, which is a South Korean financial holding company, said that the acquisition of the majority stake in the insurance company will enable it to expand its footprint in the market.
The company also expects the investment in Orange Life Insurance to boost its non-banking business.
An official of Shinhan Financial has been quoted in The Korea Times as saying: “Insurance is a good business to be in given the country’s aged society and mature financial industry.
“The acquisition of the insurer will help balance the group’s businesses, which had been too focused on banking and credit cards.”
Orange Life, which has assets worth KRW31.5tn ($28bn) would help Shinhan Financial Group’s total assets to cross KRW484tn ($430bn) upon closing of the transaction which will be subject to approval from South Korea’s Financial Services Commission.
The seller of the stake – MBK Partners had acquired 100% of ING Life Korea from ING Group, a Dutch financial firm, in 2013 for a sum of KRW1.8tn ($1.6bn).
ING Life Korea, which is presently known as Orange Life Insurance, was established in 1987. It is among the largest foreign life insurers in South Korea.