Daewoo to sell $1.1b Kyobo Life stake to Affinity-led PE group
A group of investors led by Affinity Equity is buying a KRW1.2 trillion ($1.1 billion) stake in unlisted Kyobo Life Insurance, the smallest of South Korea’s Big Three life insurers, from Posco-owned Daewoo International.
According to Daewoo's regulatory filing posted on the Korean Exchange on Wednesday, it has agreed to sell its 24% stake in Kyobo at KRW245,000 per share.
A Daewoo spokesman confirmed Affinity as one of the buyers, Reuters reported. Two sources with direct knowledge of the matter also told the news agency that the other buyers would be the Government of Singapore Investment Corp (GIC), Baring Private Equity Asia and South Korea's IMM Private Equity.
The deal comes two months after Ontario Teachers Pension Plan acquired a close to 10% stake in the insurance company from South Korean state-owned Korea Asset Management Corp (KAMCO) for $398 million.
With Korean regulations preventing foreign investors from owning more than 10% of an insurance company, GPs were required to recruit partners for Daewoo's interest. Affinity is said to take close to 10%, with the other three players buying stakes close to 5% each.
Daewoo accepted final bids in early summer for its stake in Kyobo Life. Australia's Macquarie is one of the advisors.
Samsung Life Insurance and Korea Life Insurance, the other two of the Big Three, are already publicly listed, and Kyobo is ultimately expected to go the same way. "Several Korean life insurance companies have gone public in the last few years and this remains the trend," one GP who participated in the bidding told AVCJ in June.
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