[THE INVESTOR] Shinhan Financial Group, Korea’s second-largest financial services firm, on Aug. 14 said it has resumed talks with local private equity firm MBK Partners to acquire ING Life Insurance. 

Shinhan is seeking to acquire 59.15 percent stake in the life insurer held by MBK Partners for around 2.4 trillion won (US$2.11 billion). The price is based on a 20 percent management premium over ING Life’s share price that closed at 41,500 won on Aug. 13. 

“We have decided to acquire ING Life and are working toward that direction,” Shinhan Financial Group CEO Cho Yong-byung told reporters.
Shinhan had secured exclusive negotiation rights for the purchase from February to April, but couldn’t seal the deal as the PEF sought more than 2.5 trillion won, much higher than Shinhan plans to spend. 

Once the mega deal is completed, Shinhan, which has been seeking to acquire ING Life to strengthen its non-banking business, could beat its rival KB Financial Group to become the largest finance services firm. 

In 2013, MBK Partners purchased 100 percent stake in ING Life Insurance from Dutch financial company ING Group for 1.8 trillion won. It sought to sell the insurer to Chinese investors in 2016, including Anbang Insurance Group, but the deal fell through due to a political row between Korea and China. MBK Partners, instead, debuted ING Life on the stock market last year. 

Industry watchers say MBK Partners is eager to exit from the insurer before its name is changed to Orange Life, after the existing brand license expires this year after five years. 

On the acquisition news, shares of ING Life tumbled 12.41 percent to close at 36,350 won.

By Ahn Sung-mi (sahn@heraldcorp.com)