The financial services group has now sold the South Korean unit to MBK Partners Ltd.
ING Groep NV has now announced that it has managed to sell its South Korean life insurance unit, after having made the second attempt with a span of twelve months to accomplish this goal.
It managed to raise approximately $1,646,800 (1.38 trillion South Korean Wan).
The amount for the purchase was agreed upon by the buyer, MBK Partners Ltd., which is an Asian buyout company that was created by executives formerly from the Carlyle Group. Reports on the sale of the life insurance business have indicated that the proceeds will be paid by MBK in cash.
ING will also receive a stake of approximately 10 percent in ING Life Insurance Korea Ltd.
The stake into the life insurance unit for ING will be for about 120 billion South Korean won (approximately $107,400), according to a statement from that company. For up to the next five years, the South Korean operation of the business will continue its operation under the ING brand.
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By divesting itself of this additional Asian life insurance unit, ING has brought itself yet another step closer to its goal of ending the European Union regulator imposed restructuring plan which has required the company to sell its insurance operations worldwide. This acquisition by MBK is also the biggest financial assets purchase that the Seoul based company has made, so far.
According to analyst Lee Chul Ho, of Korea Investments & Securities Co. “Maintaining the ING brand will be a big help to MBK,” adding that “MBK should ponder its strategy to restructure the insurer amid this low-growth, low-rate era for its exit some day. As the South Korean economy is facing slower growth, it’s the agenda for every insurer here.”
ING and MBK intend to have the deal completed by the end of this year, subject to approval from regulators, according to ING in a statement that it released on the subject of the sale of this life insurance unit. Upon the announcement of the sale, shares of ING slipped by up to 1.9 percent.