The next move of Kyobo Life Insurance (KLI) is drawing a lot of attention since it indicated its intention to buy Woori Finance Holdings Co., a Seoul-based banking and financial services holdings company. The company was reported to make contact with the Macquarie Group, a global investment bank and financial services group. In fact, the largest investment bank in Australia was chosen as a role model of Korea's financial institutions by Shin Je-yoon, chairman of the Financial Services Commission (FSC). Therefore, the potential of Macquarie as a force that can change widespread skeptical attitudes towards the ability of corporate acquirers to finance large acquisitions and their relevant experience in bank management is receiving big attention.
According to industry sources on August 16, KLI recently had contact with Macquarie Group. Kyobo, which already has ownership rights to the acquisition of Woori Financial Group as a strategic investor, is pushing forward with a plan to form a consortium by attracting more than three investors from the US, Europe, and Japan, such as J.P. Morgan and the Ontario Teachers' Pension Plan (OTPP), as well as private equity funds as financial investors. The financial markets think that the involvement of the Sydney-based bank as one of the financial investors is possible.
The FSC believes that the takeover of the largest banking group in Korea by a leading Australian firm specialized in banking, financial, investment, and funds management services is less risky compared to a big bank. An AFSC official pointed out, "Kyobo Life Insurance can gain a competitive advantage over rivals in the acquisition battle, depending on whether it secures funds, inherits the management expertise of advanced financial firms, and what kind of consortium it establishes.”
Some people in the financial industry think that the fact that CEO & Chairman Shin Chang-jae holds only 33.8% of Kyobo Life shares can be a major obstacle for the deal. But others argue that KLI's ownership is strong due to its participation of foreign shareholders by means of favorable shares. The largest holder of Kyobo Life is CEO & Chairman Shin, followed by OTPP with 9.93%, and Corsair Capital with 9.79%.
There is a general consensus that Kyobo Life Insurance was engaged in a takeover bid for ING Group's Asia-Pacific subsidiaries. But even then, it paid more attention to the acquisition of Woori Financial Group. A KLI official said, "We are placing more weight on Woori Finance Holdings rather than the ING Group."
Despite KLI's focus, many think that three variables are too many, since the Woori takeover will take place after 2014. The KLI official remarked, "Kyobo Life Insurance is indeed interested in the acquisition deal, and yet, because there are no specific conditions of sale, our company has no choice but to see what happens next."