Advisory firms’ eyes on Prudential deal Korea’s financial behemoths are among the most likely candidates to bid for the insurer
Translated by Ryu Ho-joung 공개 2019-12-06 08:00:00
이 기사는 2019년 12월 06일 08:00 thebell 에 표출된 기사입니다.
With Prudential Life Insurance officially put on the market, some major players in the M&A advisory industry are moving fast to increase their fee revenue by winning an advisory role on a deal that could fetch more than two trillion won ($1.7 billion).U.S.-based Prudential Financial has named Goldman Sachs as lead manager of the sale of its South Korean unit and been tapping potential bidders, industry sources said Tuesday. The sale process is expected to be expedited, as the insurer reportedly has showed a strong intention to sell the business.
The possibility of the sale is nothing new in the industry, but it is only recently that Prudential Financial kicked off the sale process in earnest. Amid the lack of trillion-won-size deals in the domestic M&A market, the key players in the advisory space are working hard behind the scenes to lobby potential buyers of the company, the sources said.
Among those who could potentially have an interest in the sale are the country’s financial behemoths, such as KB Financial Group, Woori Financial Group and Hana Financial Group. But Shinhan Financial Group, which already bought Orange Life Insurance earlier this year to expand its insurance business, seems likely to let the opportunity pass. With the sale process in the early phase, other domestic financial holding companies are in a wait-and-see mode. However, the advisory industry is keeping a close watch on the situation.
In particular, advisory firms’ eyes are focused on Woori Financial Group, which shifted to a holding company structure most recently. It has been active in the acquisition market over the past year, buying ABL Global Asset Management and Tongyang Asset Management from China's Anbang Insurance Group in April as well as a controlling stake in Kukje Asset Trust, a real estate management company, from the largest shareholder in July. Samil PricewaterhouseCoopers (PwC) acted as the financial adviser on both deals, while Shin & Kim and Kim & Chang acted as the legal counsel to the group.
KB Financial Group is also one of the likely candidates to bid for Prudential Life Insurance, through some industry experts say that the mid-size insurer would not be able to tempt the country’s largest financial group to join the bidding race. KB Financial Group has been quite in the M&A market since it merged with Hyundai Securities in 2016, in a deal where it worked with Morgan Stanley, Deloitte Anjin and Kim & Chang.
Major players in the private equity industry may also come forward for the business, all the more after MBK Partner successfully exited from its investment in Orange Life Insurance (formerly ING Life Insurance) last year. Advisory firms are seemingly considering various possibilities, from private equity firms attempting to buy the insurer on their own to forming a consortium with strategic buyers.
“Though skepticism is growing about the outlook of the insurance industry, Prudential Life Insurance is widely considered one of the high-quality insurers with a strong profitability and financial soundness,” said an industry insider. “With a high probability of the deal’s success, many [advisory firms] are already trying to lobby several potential bidders.”
(By reporter Han Hee-yeon)
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