[THE INVESTOR] Shinhan Financial Group announced on Sept. 5 that it will acquire majority stake in Orange Life Insurance, formerly known as ING Life Insurance Korea, for 2.29 trillion won (US$2.04 billion).

The Korean financial holding firm will pay 47,400 won apiece for 48.5 million shares, or 59.15 percent stake, in Orange Life, according to its regulatory filing.

As of Sept. 4, the stake is valued at 1.68 trillion won, a premium of 610 billion won.

This is the third-largest merger and acquisition deal by Shinhan Financial following its LG Card acquisition worth 6.7 trillion won and merger with CHB Bank for 3.3 trillion won in 2006. 

Orange Life's main office in downtown Seoul

The acquisition of the nation’s fifth-largest insurer in terms of assets will help it gain a bigger presence in the market, Shinhan said in a statement.

According to industry sources Shinhan Financial aims to regain the title of the most-profitable financial group in the country with the acquisition. It maintained the top position for nine consecutive years until it was dethroned by KB Financial last year. In the first half of this year, KB recorded a net profit of 1.9 trillion won while Shinhan logged 1.79 trillion won.

The deal is subject to regulatory approval.

MBK Partners purchased 100 percent stake in ING Life Insurance from Dutch financial company ING Group in 2013 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.

By Park Ga-young (gypark@heraldcorp.com)