Daum Sells Insurance Unit to German Firm

Daum Communications Corp., South Korea's second-largest Internet portal operator, said Monday that it has signed a deal to sell a 35.7 percent stake in its on-line auto insurance unit to a German company for 40.91 billion won ($44.5 million).

The deal calls for Daum to sell a total of 5 million shares in Daum Direct Auto Insurance Co. to ERGO, a subsidiary of Munich Re AG., the world's second-biggest re-insurer, the company said in a statement.

The deal, if carried out, would bring the German company's shareholding in Daum Direct to 65 percent. Daum will hold a 10 percent stake in the insurance company, while LIG Insurance has a 25 percent holding.

Daum said that the sale of the insurance unit, launched in 2004 jointly with LIG Insurance, is intended to streamline its business lineup and focuses more on Internet portal operation.

Daum Direct is the nation's second-largest auto insurance firm with a market share of 15.1 percent, following Kyobo Axa. In the third quarter, the company posted 88.1 billion won in sales.