MBK to sell stake in Korean life insurer for $2b

Shinhan said in a filing that it would acquire 48.5 million shares in Orange Life, or a 59.15% stake, for KRW47,400 apiece. The stock closed at KRW34,200 on September 5.

MBK sought to sell the asset in 2016 but failed to secure a deal. It relaunched the process earlier this year, conscious that the firm’s trademark agreement with ING Group was nearing an end. The rebranding as Orange Life happened last month. However, concerns over pricing prompted KB Financial to abandon its bid, while Shinhan was said to have initially pulled out in April.

Orange Life is Korea’s fifth-largest life insurer by assets, which stood at KRW31.5 trillion as of last December. Premium income came to KRW3.16 trillion in 2017, up 0.5% year-on-year, while total operating revenue rose 1.8% to KRW4.34 trillion. Orange Life posted a net profit of KRW340.2 billion for the year, up from KRW240.7 billion in 2016.

Total domestic life insurance premiums in Korea came to KRW114 trillion in 2017, with the country’s big three domestic insurers – Samsung Life, Hanwha Life and Kyobo Life – accounting for 45.4% of the market. Orange Life had a 4.1% share.

MBK paid KRW1.84 trillion for the business in 2013, taking a 90% stake with ING Group retaining the balance. It financed the initial acquisition through a KRW1 trillion ($846 million) syndicated loan and completed a $119.8 million leveraged recap in 2015. It was also granted the right to use the ING brand for up to five years.

By the time of Orange Life’s IPO in April 2017, MBK held a 100% interest. The offering saw 33.5 million shares – all of them owned by the private equity firm – sold for KRW33,000 apiece, generating proceeds of KRW1.1 billion.

This is MBK's second sizable exit announced in the last few weeks. It earlier agreed to sell telecom services provider Wharf T&T to Hong Kong Broadband Network (HKBN) at an enterprise valuation of HK$10.5 billion ($1.3 billion). That was a joint deal with TPG Capital.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• North Asia
• Trade sale
• Financials
• South Korea
• MBK Partners
• Exit