Anbang gets approval to acquire Allianz Korea
By Nam Hyun-woo
The Financial Services Commission (FSC) approved China’s Anbang Insurance Group’s acquisition of Allianz Life Korea, Wednesday.
Anbang Group Holdings, a Hong Kong-based subsidiary of Anbang Life Insurance, became the sole shareholder of Allianz Life Korea. Anbang Insurance Group owns Anbang Life Insurance, which owns Anbang Group Holdings.
The regulator also approved Anbang Group Holdings to become a major shareholder of Tongyang Life Insurance.
Anbang Life Insurance bought a majority stake in Tongyang Life a year ago and carried out a 620 billion won ($51 million) rights issue which allowed Anbang Group Holdings to hold a 33.3 percent stake in Tongyang. Those who want more than a 10 percent stake in a financial firm here need FSC approval.
Anbang has yet to get permission from the Chinese authorities.
In April, Allianz’s German headquarters decided to dispose of its money-losing Korean unit for $3 million, far below market expectations of $300 million.
Anbang applied for FSC approval in August.
Unlike the smooth process for approval of Anbang Life’s Tongyang acquisition, however, the process for closing the Allianz Korea deal took a relatively longer time.
In approving the Tongyang deal, the FSC took 54 days before giving the green light, but the regulator took almost four months to get data on Anbang Group Holdings, a paper company relatively unknown compared to Anbang Life, from China.
According to a source close to the matter, Allianz Korea’s recent decision to pay overdue death claims to family members of those who commit suicide became a catalyst for the regulator’s approval of Anbang’s takeover of Allianz Korea.
“There seems to be a deal between the financial authorities and Allianz Korea over paying benefits of overdue death claims for suicide cases,” the source said asking not to be named.
The Financial Supervisory Service has been urging life insurers to pay overdue death claims for suicide cases. Allianz Korea was one of four large insurers that were tenaciously refusing to pay out benefits but eventually gave in, sparking other firms to consider paying them.
As the FSC gave the go-ahead to Anbang’s acquisitions, the Chinese insurance titan is expected to merge Tongyang and Allianz Korea, given the group has put up Anbang Group Holdings for both acquisitions. Should all the acquisitions wrap up, Anbang Group Holdings will virtually become a holding company that has a 33 percent stake in Tongyang and 100 percent of Allianz Life Korea.
If those firms are merged, the resulting entity will become the nation’s fifth-biggest life insurer with 43 trillion won in assets, rallying past the merger of Mirae Asset Life and PCA Life.