ING's Asia exit plan nears end as MBK agrees to buy South Korea unit
By Joyce Lee and Denny Thomas
SEOUL/HONG KONG (Reuters) - ING Groep ING.AS edged closer to completing its year-and-a-half-old Asia divestment plan after private equity firm MBK Partners agreed to buy its South Korean insurance unit for total cash proceeds of 1.84 trillion won ($1.65 billion).
Under the agreement announced on Monday, the bailed-out Dutch insurer will retain about a 10 percent stake in the South Korean unit and allow MBK to use the ING brand for up to five years.
The sale of the South Korean unit will leave ING with its Japan insurance unit left to sell, bringing it closer to fulfilling its agreement with European regulators to offload more than 50 percent of its Asian operations by the end of 2013.
Since its rescue in 2008, ING has dismantled its once-fashionable banking and insurance model and announced thousands of job cuts and other cost savings. ING has raised about 23 billion euros ($31 billion) in total from divesting insurance, investment management and other assets to repay state aid.
ING will own a 120 billion won stake in the South Korean unit, confirming an earlier Reuters story.
"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," Jan Hommen, CEO of ING Group, said in a statement.
"Through its 10 percent stake, ING will be able to benefit from that growth potential," he added.
The deal values ING Life Korea, the nation's biggest foreign insurer, at 9.2 times fiscal year 2012 earnings and 0.73 times book value as of March 31, 2013, the statement added. South Korean life insurers on average trade at a price-to-book ratio of 0.83, according to Thomson Reuters data. Continued...