Procedures to sell South Korea’s fifth largest life insurer ING Life Insurance took off as local private equity fund MBK Partners Ltd. initiated a preliminary stage for a tender in its 100 stake in the insurer it took over in 2013. Given initial interest, the insurer could also fall under Chinese capital that has been fast expanding its presence in the Korean financial scene by snatching up most of the merger and acquisition offerings.

According to the insurance and investment banking industries on Wednesday, letters inviting expression of interest were sent out to 15 candidates at home and abroad. Morgan Stanley is leading the sale procedure. Among them are China’s second largest life insurer Ping An Insurance Company of China and Anbang Insurance Group that ascended to fifth largest life insurer in Korea after it recently acquired Allianz Life Insurance Korea following last year’s purchase of Tongyang Life Insurance Co. From local competition, KB Financial Group, Hanwha Life Insurance Co. and Kyobo Life Insurance Co. have taken an invitation. MBK Partners acquired a 100 percent stake in ING Life Insurance at 1.8 trillion won ($1.57 billion) from Dutch multinational banking and financial group ING Group in December 2013.

In terms of financing capacity, Ping An Insurance and Anbang Insurance of China and Korea’s KB Financial Group would be most eligible. Chinese insurance companies today rank among the largest in the world as the populous market expanded at furious pace together with economic growth. Their expansionist stretch has been evident in the Korean market as well. KB, which previously failed in its first attempt to buy ING Life, will likely re-bid.

Estimates for the deal are mixed ranging as wide as between 1.5 trillion won and 3.5 trillion won. They are about 0.35 to 0.82 times the price-to-book value ratio of ING with net worth of 4.27 trillion won at the end of December.

By Han Woo-ram

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