Global insurance giant ING Group has selected the South Korean private equity fund MBK Partners Ltd. as the preferred bidder for the sale of its South Korean unit, industry sources said Sunday.
According to the sources, MBK offered to purchase a full stake in ING Life Korea for around 1.8 trillion won ($1.6 billion), changing its earlier suggestion at buying a 90-percent stake for 1.5-1.6 trillion won.
Tongyang Life Insurance Co., South Korea’s fifth-largest insurer, was earlier selected as the main bidder in its joint consortium with the local private equity fund Vogo Fund, but negotiations stalled as Tongyang Group objected to split off its life insurance unit, which was one of the conditions for the deal.
The country’s financial law prohibits conglomerate-owned financial firms such as Tonyang Life from holding more than a 30-percent stake when making a joint investment with an equity fund.
The Netherlands-based ING Group is required to sell over 50 percent of the stake in its South Korean unit before the end of the year and 100 percent by the end of 2016 under an agreement with the Dutch government that was signed in 2008 in exchange for rescue funds. (Yonhap News)
