Samsung Life Insurance Co. has secured regulatory approval to absorb Samsung Fire & Marine Insurance Co. as a subsidiary, with plans to complete the incorporation by the end of this month.
The life insurance arm of Samsung Group, South Korea’s largest conglomerate, announced Tuesday that the Financial Services Commission granted approval on March 19, clearing the way for Samsung Fire to become its subsidiary. The two insurers currently operate separately within the Samsung structure.
Following the approval, Samsung Fire’s board on Tuesday approved the retirement of treasury shares. The company will retire shares worth 512.6 billion won ($349.4 million) on April 30, including 1,365,682 common shares and 92,490 preferred shares. The buyback price was set at Monday’s closing levels — 357,500 won per common share and 271,000 won per preferred share.
The treasury share retirement will increase Samsung Life’s stake in Samsung Fire from 14.98 percent to 15.43 percent, surpassing the previous 15 percent cap that restricted one insurer from holding a controlling stake in another. The FSC’s recent approval lifted this restriction, enabling Samsung Life to take Samsung Fire under its umbrella as an affiliate.
Samsung Fire said the treasury share retirement will be conducted within the scope of distributable profits, stressing that while the total share count will decline, there will be no reduction in capital.
Meanwhile, Samsung Fire plans to reduce its treasury shareholding from 15.9 percent to around 5 percent by 2028, aiming to enhance corporate value and achieve a 50 percent shareholder return. If the plan proceeds as intended, Samsung Life’s stake will rise to 17 percent.
Both companies have emphasized that their operations will remain independent. Financial Supervisory Service Gov. Lee Bok-hyun also underscored last week that the subsidiary incorporation "will not affect the governance structures" of Samsung Life, Samsung Fire or other Samsung affiliates.
"The incorporation merely addresses a technical issue arising from Samsung Fire’s value-enhancement efforts, which led to an increase in Samsung Life’s stake," Lee said, adding, "As long as ownership stays below 20 percent, there will be no impact on their accounting."
By Choi Ji-won (jwc@heraldcorp.com)
