Korea Development Bank (KDB) is marking a fifth attempt to sell off its life insurance unit, KDB Life Insurance, with several private equity funds submitting letters of intent for the deal.
KDB has attempted to sell the unit back in 2014, 2016, and 2020. In 2020, JC Partners was successfully selected as the preferred negotiating partner, but the deal fell through due to qualification issues for the controlling shareholder.
With the life insurance industry in the country becoming less attractive due to an aging population, KDB is now trying for a fifth time to sell the unit. To make the sale more viable for potential bidders, a report from Pulse News Korea found that the bank is taking steps to reduce the financial burden by reducing the capital of KDB Life Insurance.
Industry sources close to the matter said that Samil PwC, the current lead adviser for the sale, has receive to letters of intent from at least two new private equity funds. The sale will involve 92.7% of the total stake in KDB Life Insurance, with market observers estimating the price at around US$150 million.
The lead adviser will continue to receive letters of intent until the main bidding, which is scheduled from sometime in early to mid-June. On June 8, a shareholders’ meeting is also scheduled to gain approval for a capital reduction plan.
Conversely, another Korean bank, BNK Financial Group, is considering the purchase of an insurance company to become a comprehensive financial institution and address inefficiencies in the banking system.
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