By Jun Ji-hye | The Korea Times | March 17, 2025<\/p>\n
Meritz Fire & Marine Insurance abandoned its acquisition of MG Non-Life Insurance on Thursday, after facing strong opposition from the latter’s labor union, industry officials said.<\/p>\n
MG Non-Life Insurance was designated as a financially troubled institution by the Financial Services Commission (FSC) in April 2022 and put up for sale by the state-run Korea Deposit Insurance Corp. (KDIC). This marks the fifth failed attempt to sell the company.<\/p>\n
Officials noted the latest acquisition failure increases the likelihood of MG Non-Life Insurance facing liquidation or bankruptcy.<\/p>\n
Meritz said in a statement it was selected as the preferred bidder for a purchase and assumption (P&A) of MG Non-Life Insurance by the KDIC on Dec. 9, but decided to forfeit its status \u201cdue to differences in stance[s] between the parties involved.\u201d<\/p>\n
After being selected as the preferred bidder, the non-life insurance arm of Meritz Financial Group attempted to conduct due diligence for the acquisition, but MG’s union strongly opposed the process, physically blocking officials from entering its headquarters.<\/p>\n
The union demanded the withdrawal of the P&A process, which does not include employment succession obligations, and instead called for a merger and acquisition approach that would take over both assets and liabilities.<\/p>\n
On March 4, Meritz proposed its final terms, including a 10 percent job guarantee for employees and a total of 25 billion won ($17 million) in severance compensation for nonretained workers.<\/p>\n
As the union rejected the offer, Meritz decided to forfeit its status as the preferred bidder.<\/p>\n
Following Meritz\u2019s withdrawal, the FSC, the Financial Supervisory Service and the KDIC issued a joint statement, noting the prolonged sales process had led to a continued deterioration in MG Non-Life Insurance\u2019s financial soundness and overall business environment.<\/p>\n
\u201cConcerns are growing in the market over MG Non-Life Insurance\u2019s ability to survive independently, and the government is taking them seriously,” the statement read. \u201cWe will respond to this matter in accordance with laws and principles.\u201d<\/p>\n
The KDIC plans to first conduct a market survey to identify potential buyers. However, given that five previous sales attempts have already failed, many believe that finding a new bidder will be challenging.<\/p>\n
This increases the risk of MG Non-Life Insurance\u2019s liquidation or bankruptcy, heightening concerns among its 1.24 million policyholders.<\/p>\n
If this happens, policyholders will be able to receive refunds within the limits of deposit protection but will incur losses beyond that coverage. Meanwhile, all MG Non-Life Insurance employees will lose their jobs.<\/p>\n","protected":false},"excerpt":{"rendered":"
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