South Korean firm KB Insurance is looking to purchase a 17% stake in Bao Minh Insurance, the third-largest general insurance company in Vietnam.

According to a report by Business Korea, if the transaction pushes through, KB Insurance will become the second-largest shareholder in Bao Minh Insurance, overtaking global giant AXA, which holds a 16.7% stake.

KB Insurance’s board will meet in early December to decide on how to proceed with the stake purchase. A formal agreement will be signed once the board has agreed to the proposal

“The board of directors will vote on the proposal next week,” an official from the Korean insurer said. “It is hard to disclose detailed terms and conditions of the contract and policy on cooperation for now.”

KB Insurance expanded into the Vietnamese market by opening an office in Hanoi in 1995. It later opened an office in Ho Chi Minh in 2001. Vietnam’s low insurance penetration and expanding middle class have made it, like many other Southeast Asian markets, an attractive destination for insurers based in more mature markets such as South Korea.

Bao Minh Insurance has net assets totalling KRW107.88 billion (US$95.6 million). It is controlled by the State Capital Investment Corp. (SCIC) which has a 50.7% stake.