By Lee Yeon-woo | The Korea Times | July 9, 2023
Hana Financial Group has entered the fray to acquire KDB Life, the insurance arm of the Korean Development Bank (KDB).
This move is viewed as an attempt to enhance its competitiveness in the insurance market, particularly as its rivals, KB Financial Group and Shinhan Financial Group, seek to strengthen their non-banking arms through separate acquisitions.
According to the sources in investment banking industry, Sunday, Hana Financial Group participated in the bidding process for the acquisition of KDB Life which closed on Friday.
The process was supervised by Samil PwC and KDB, the insurance firm’s largest shareholder. Up for grabs is 92.73 percent of KDB Life’s shares, worth 200 billion won ($153.4 million).
Earlier, it was understood that private equity (PE) fund operators, including Cactus PE and WWG Asset Management, had reviewed the acquisition. However, none of them participated in the final bid.
Market watchers believe that the likelihood of Hana acquiring KDB Life is high and that it will bolster Hana’s efforts to expand its non-banking affiliates. Although the group already owns insurance firms, including Hana Life and Hana Insurance, these subsidiaries have yet to make a significant impact in the highly competitive market.
As of the first quarter of this year, Hana Life ranks 17th among 22 life insurance firms, holding approximately six trillion won in assets. If Hana successfully acquires KDB Life, its life insurance sector is expected to rise to 8th in the industry.
Now that Hana has thrown its hat into the ring, all eyes are on whether KDB will finally succeed in selling KDB Life. The insurance firm has been put up on the M&A market five times in the last ten years, due to a downward trend in the insurance market and failure to find a suitable buyer.