China's Anbang agrees to sell two S. Korean asset management subsidiaries to Woori Financial

09, Apr. 2019

SEOUL, AJU - Woori Financial agreed to acquire two mid-sized investment management companies in the first acquisition of non-banking units since Woori Bank, a state-controlled lender bailed out with taxpayer's money during a financial crisis decades ago, was turned into a holding company in January.

Woori Financial Holdings said Monday it signed a stock purchase agreement with China's Anbang Insurance Group on the acquisition of Tong Yang Asset Management and ABL Global Asset Management, formerly known as Allianz Life Insurance Korea. Woori would acquire 73 percent of Tong Yang for 123 billion won ($107 million) and 100 percent of ABL Global for an undisclosed sum.

Tong Yang Asset is a subsidiary of Tongyang Life Insurance acquired by Anbang in 2015. The insurance company said in a regulatory filing that proceeds from the deal would be used for new investments.

“Starting with the acquisition of asset management companies, we will expand our portfolio of non-banking businesses to include real estate trusts, capital banks, savings banks, securities companies and insurance companies to strengthen our status as a comprehensive financial group,” Woori Financial Holdings chairman Sohn Tae-seung said in a statement.

Woori has promised to actively push for the acquisition of non-banking units for diversified banking and non-banking services since it launched a holding company in January. Because it is now free from government restrictions, Woori can acquire other units to provide diversified services in securities, asset management and real estate trusts.

The financial group signed a memorandum of understanding on April 3 to acquire a controlling stake in Kukje Asset Trust, which manages 23.6 trillion won in assets.

Woori was bailed out with 12.8 trillion won in state money during the 1998-99 Asian financial crisis that forced a sweeping consolidation of financial institutions. As a result, the government held a 51-percent stake in the bank. For privatization, the government sold a 28 percent stake to seven institutional investors in 2016.