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By Kim Yoo-chul
Shinhan Bank is seeking to acquire ING Life for 2.5 trillion won, sources familiar with the issue said, Tuesday.
"Shinhan Financial is interested in ING. The financial group wants to close the deal for 2.5 trillion won including the management premium," one source in the local private equity fund industry (PEF) told The Korea Times.
He added the banking group is considering partnering with strategic financial investors to lessen the financial burden for what officials say is a "mega-sized acquisition."
"Shinhan Financial is in the process of studying and analyzing ING's market valuation. If the deal gets approval from its board, then it would be a plus factor to help Shinhan expand its business portfolio to non-banking, which is quite promising and lucrative," said the senior industry executive.
MBK Partners, Korea's top private equity company, bought ING from ING Group for 1.8 trillion won in 2013.
By last year, ING's assets totaled 31.4 trillion won, the sixth-largest among its domestic competitors. ING generated 4.32 trillion won last year. Its profit for 2017 reached 340 billion won, according to data provided by financial regulators.
"The solid financial soundness of ING is the most attractive factor for Shinhan, I think. Its debt ratio is manageable," said another source at the PEF industry.
The two PEF sources admitted that Shinhan's chief rival KB is also attempting to acquire ING to solidify its leadership as the country's leading bank. "Given its stable position in the banking sector, KB has a relatively weak portfolio in non-banking especially life insurance," said the second source.
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