China’s Anbang Insurance Group, the largest stakeholder of Tongyang Life Insurance, has emerged as the front runner to acquire the head office of Yuanta Securities in Seoul despite growing friction between South Korea and China over the planned deployment of U.S. missile system Terminal High Altitude Area Defense (THAAD).

According to investment bank sources on Thursday, UBS Hana Asset Management, the seller of the building, is in the final negotiation with Tongyang Asset Management, which was said to be picked as a preferred bidder, for the sale of the building. Anbang Insurance took over Seoul-based Tongyang Asset Management and Tongyang Life Insurance in 2015. The two parties reportedly aim to close the deal by the end of next month, according to sources.

Tongyang Asset Management is reported to have offered 25 million won ($21,579.63) per 3.3 square meters for the building that is currently rented out to Yuanta Securities.

It would be the Chinese insurer’s first real estate investment in Korea if it succeeds in buying the building. Anbang’s attempt to buy the building also drew attention after many Chinese companies have withdrawn their plans to invest or do business in Korea amid growing hostility towards Korean products and companies in China due to Seoul’s decision to deploy U.S. THAAD system.

The mid-to-large size office building in Euljiro, central Seoul, drew much interest from investors thanks to its viable tenant, Yuanta, but risk has soon emerged as the securities firm started to look for a new headquarters building. But Anbang Insurance plans to use the building as the head office for its Korean subsidiaries including Tongyang Life Insurance if Yuanta Securities moves out later.

As Yuanta that is given to rights to first buy the building will not likely exercise the rights due to high bidding prices, Anbang Insurance is expected to succeed in buying the building through Tongyang that has offered an attractive price, local IB experts anticipated.

By Song Gwang-sup

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]