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MBK Partners to pick up ING’s Korean life insurance arm in $1.65bn deal

27 Aug 2013

Korea flagAsia-Pacific focused private equity major MBK Partners has agreed to buy the Korean life insurance business of The Netherlands’ ING Groep  in a deal worth KRW1.84tn ($1.65bn).

ING will continue to hold a 10 per cent indirect stake in the business  following the deal, which also allows ING Life Korea to continue using the brand for up to five years.

The transaction values ING Life Korea at 9.2-times its fiscal 2012 earnings and 0.73-times its book value at the end of March 2013, both on a local Korean GAAP basis

European regulators ordered ING sell off more than half of its Asian operations by the end of this year to comply with the terms of its bailout in 2008.

ING Groep CEO Jan Hommen said, “This transaction is a major step in the divestment of our Asian insurance and investment management activities.

!Together with the scheduled payment of the next tranche of the core Tier 1 securities to the Dutch State in November 2013, this will bring us further into the end phase of the restructuring of our company.

“I am convinced that with the support of MBK Partners, ING Life Korea will continue to grow its customer offering and build on its position as the fifth-largest insurance company in the Korean market.

“Through its 10% stake, ING will be able to benefit from that growth potential.”

In July it was reported that MBK was nearing the $2.6bn hard cap for its biggest-ever buyout fund thanks to massive oversubscription.

PEI said the fund had made a penultimate close on $2.3bn, putting it already well ahead of the $1.6bn it gathered for Fund II in 2008 and its $1.56bn debut fund in 2005.

Its latest fund will continue the firm’s strategy of targeting companies in China, Hong Kong, Japan, South Korea and Taiwan by predominantly seeking controlling stakes.

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