MBK, PE-backed insurers bid for ING’s Korean unit

According to Reuters, Hanwha Life Insurance, which is South Korea's second-largest insurer by assets, is also expected to submit its own bid.

KB Financial dropped its bid last December, after months of negotiations. This time ING has asked bidders to submit bank letters of credit as a way to guarantee financial backing.

The Dutch insurer is on a deadline to sell more than 50% of its Asian operations by the end of 2013, as part of the conditions tied to a EUR10 billion ($13 billion) state bailout agreement from 2008. It can divest the remaining interest by the end of 2016.

ING Life Insurance Korea is the country's fifth-largest life insurer with 22.7 trillion won ($20.11 billion) in assets as of end 2012. Although ING is said to value the business at up to KRW3.6 trillion, the bids are expected to be lower, reflecting the deadline for completion of a deal.

Kyobo is South Korea's third-largest insurer. Ontario Teachers' Pension Plan bought a 9.9% stake in the company last year and a further 24% was sold to a private equity consortium comprising Government of Singapore Investment Corp. (GIC), Affinity Equity Partners, Baring Private Equity Asia and IMM Private Equity.

Tongyang, the country's eighth-largest life insurer, is majority owned by Vogo. The private equity firm bought 17% of the business in 2006 on the condition that it would get first refusal on any further sale. This happened in 2010 and Vogo's stake rose to 64%.

MBK is currently raising its third buyout fund, which has a target of $2.25 billion. It reached a first close of $1.25 billion in November 2012, and will focus on control transactions in South Korea, Japan and Greater China.

ING has already made deals to sell its Hong Kong, Malaysian and Thai businesses for a total of $3.9 billion. The Malaysia unit went to AIA Group while the latter two were picked up by Richard Li's Pacific Century Group for EUR1.64 billion.

ING still has Japanese insurance operations left to sell.

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• Topics
• North Asia
• Buyouts
• Financials
• South Korea
• MBK Partners
• Vogo Investment
• buyout
• Financial Services