Step for Financial Holding Company
Samsung Life Insurance decided to purchase 8,359,040 Samsung Securities shares, equivalent to 10.94% of the total, by investing approximately 290 billion won Samsung Life Insurance decided to purchase 8,359,040 Samsung Securities shares, equivalent to 10.94% of the total, by investing approximately 290 billion won. Then, Samsung Life Insurance’s share in Samsung Securities rises from 19.16% to 30.1%. The stock purchase is to be finalized after authorization in the United States and Britain, where Samsung Securities’ overseas offices are located.
As a result of the purchase, Samsung Life Insurance is expected to be able to govern Samsung Securities as its subsidiary. Likewise, Samsung Life Insurance bought Samsung Card shares from Samsung Electronics in January this year to raise its share in the credit card company to 71.86%.
To become a financial holding company, Samsung Life Insurance has to add 15% to its share in Samsung Fire & Marine Insurance and lower its shares in non-financial subsidiaries such as Samsung Electronics and Hotel Shilla to 5% or less. At present, Samsung Life Insurance has a 15% share in Samsung Fire & Marine Insurance along with 7.7% of Samsung Electronics, 8% of Hotel Shilla and 6% of S-One. Experts are predicting that Samsung Life Insurance will satisfy the conditions to become a financial holding company in the near future by purchasing stocks from Samsung Fire & Marine Insurance.
Samsung Life Insurance explained that the recent stock purchase is for a high return on investment and business cooperation with Samsung Securities. On October 28, Samsung Securities announced that it would go for capital expansion in the long term. Recently, the South Korean government suggested a minimum equity capital requirement of four trillion won for the establishment of a major investment bank. The current equity capital of Samsung Securities is 3.4 trillion won, following those of Mirae Asset Daewoo, NH Investment & Securities and KB Securities.