KB Financial expected to take over ING Life Korea

Experts forecast deal will boost financial group’s competence


The likelihood is increasing that KB Financial, the nation’s largest financial group, will take over ING Life Korea.

KB Financial was the sole contender in the bid for the Netherlands-based insurance firm’s Korean arm on July 16, according to industry sources.

Insiders see the Korean financial group to be the naturally preferred bidder.

ING Life Korea is the fourth-largest life insurance firm in the country by market share, and is worth around 3.5 trillion won ($3.04 billion).

KB Financial offered about 3 trillion won in its bid.

The deal includes the sale of KB Life Insurance shares owned by ING Group to KB Financial Group. KB Life Insurance ranks near the bottom in the life insurance market. KB Financial Group currently owns a 51 percent share and ING Group 49 percent.

Analysts said that if KB Financial were to take over ING’s Korean arm, the lender would be able to use its 1,160 local branches to handle ING Life’s non-banking businesses such as bancassurance.

Then, KB’s insurance sector would be among the “Big 4” in the market along with Samsung Life Insurance, Korea Life Insurance and Kyobo Life Insurance.

Analysts also forecast that KB Financial Group’s competence would see a boost, supported by three stable sectors ― bank, card and insurer.

The only likely hurdle for the bid is the labor union strike against ING to commence July 31. The union announced earlier this month it would begin an indefinite strike over its members’ job security.

Banking sources said KB Financial seems determined to strengthen its competitiveness by merging with an insurance company, rather than seeking a takeover of a financial group.

KB Financial’s bid comes after the firm’s board of directors decided not to take part in the preliminary bidding for Woori Finance on Wednesday, the sources said.

By Park Min-young (claire@heraldcorp.com)