Kyobo Life Insurance Seeks to Acquire AXA General Insurance, Accelerating Transition to Financial Holding Company
Securing a Comprehensive Portfolio... Strengthening the Holding Company Structure
Resuming IPO Plans... Hopes to Resolve Put Option Disputes
Kyobo Life Insurance is moving to acquire AXA Insurance. As the company is currently advancing its transition into a financial holding company, this move is interpreted as an effort to fill a gap in its non-life insurance portfolio.
According to the investment banking (IB) industry on August 11, Kyobo Life Insurance has begun the process of selecting an M&A advisor for the acquisition of AXA Insurance. Once the advisor is selected, due diligence is expected to begin as early as the end of this month.
The origin of AXA Insurance can be traced back to Korea Automobile Insurance, the nation’s first online insurance provider, established in 2000. In 2001, Kyobo Life Insurance acquired this company, rebranding it as Kyobo Automobile Insurance. In 2007, Kyobo Life Insurance sold management control to AXA Group for 9.05 billion won. After changing its name to Kyobo AXA Automobile Insurance and then to Kyobo AXA Insurance, it transitioned to AXA Insurance in 2007. If the acquisition is completed, AXA Insurance will return to the Kyobo Group after 20 years.
Kyobo Life Insurance has continually considered entering the non-life insurance market as part of its effort to strengthen its comprehensive financial portfolio based on its insurance business. Its recent participation in the due diligence process for acquiring Yebyeol Non-Life Insurance was along the same lines. By adding a non-life insurance business, Kyobo Life Insurance expects to diversify its portfolio, which is currently focused on life insurance, and further solidify its comprehensive financial operations.
The transition to a financial holding company led by Kyobo Life Insurance is also expected to take on a more robust structure. This is because it will secure a comprehensive financial portfolio encompassing life insurance, non-life insurance, securities, asset management, and savings banking. Earlier, Kyobo Life Insurance acquired 50% plus one share of SBI Savings Bank for about 900 billion won. Last month, it also acquired a 50% stake in Kyobo AXA Asset Management from BNP Paribas Asset Management Holdings for 107.5 billion won.
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Kyobo Life Insurance also plans to resume its initial public offering (IPO). The company intends to proceed once its corporate value has been evaluated. This process is also expected to accelerate the resolution of a put option dispute with financial investors such as IMM Private Equity and EQT Partners, who possess rights to sell shares at a specific price.
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