Woori Financial eyes insurance acquisitions to bolster non-banking sector

[Photo by MK DB]

Woori Financial Group is actively exploring acquisitions of major insurance companies put for sale, such as Lotte Insurance and Tongyang Life Insurance, as part of its strategy to bolster its non-banking sector. But Woori Financial remains cautious about avoiding the so-called “winner’s curse” from overambitious bets. Investment banking (IB) industry insiders suggest that Woori Financial is keeping various acquisition options open, leveraging this approach to gain a favorable position in price negotiations.

On Wednesday, Woori Financial announced plans to sign non-binding memorandums of understanding (MOUs) with the major shareholders of Tongyang Life Insurance and ABL Life Insurance. The group is set to conduct due diligence as part of its efforts to enhance its non-banking sector. Woori Financial clarified that no specific terms of the sale have been decided yet. The non-binding nature of the MOUs allows Woori Financial to withdraw from the deal at any time.

Both Tongyang Life Insurance and ABL Life Insurance are primarily owned by China’s Dajia Insurance Group. Dajia holds a 75.4 percent stake in Tongyang Life Insurance and a full 100 percent stake in ABL Life Insurance through its subsidiaries.

IB industry experts believe that Woori Financial’s disclosure of its interest in Tongyang Life Insurance is also a strategic move to strengthen its position in the upcoming main bid for the sale of Lotte Insurance, scheduled for June 28. This announcement is seen as a tactic to enhance its bargaining power.

Woori Financial said it has participated in the preliminary bidding for the public sale of Lotte Insurance and is now preparing for the main bid. The group plans to make its final decision based on the due diligence results. The IB industry also speculates that Woori Financial is considering potential acquisitions of other insurance companies, such as MetLife Insurance.