Fubon Financial Holding Co (富邦金控) yesterday said that its life insurer arm is to acquire a controlling stake in a South Korean peer as the company expands its presence in north Asia.
Fubon Life Insurance Co (富邦人壽) is planning to raise its stake in Hyundai Life Insurance Co from 48 percent to 62 percent by purchasing 46.72 million new shares at a cost of 233.6 billion won (US$218.32 million), Fubon Financial executive vice president Joyce Chen (陳昭如) said at a news conference at the Taiwan Stock Exchange.
That would make Fubon Life the biggest shareholder in the South Korean life insurer, followed by Hyundai Mobis Co, its former parent company.
The deal is expected to be approved by Fubon Financial’s board of directors next Thursday and completed in the second half of this year, pending approval by local and South Korean regulators.
The South Korean company would also be renamed Fubon Hyundai Life Insurance.
Chen said that Fubon Life’s controlling stake would allow it to appoint key executives at the South Korean company, including president, chief investment, risk, financial and actuary officers.
Fubon Financial said it is upbeat on South Korea’s market for pension and retirement planning, and aims to strengthen the operation of its investee and generate steady returns through online marketing and digital distribution channels and a broader offering of financial services.
However, Hyundai Life has experienced layoffs and restructuring as the company continues to grapple with losses and meeting International Financial Reporting Standard 9 guidelines, which are to take effect in 2021, South Korean media reports said.
As of June last year, the South Korean insurer had a risk-based capital ratio of 164 percent, barely exceeding financial authorities’ recommendation of 150 percent, South Korean media reported.
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