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The Korea Herald
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THE INVESTOR
March 29, 2024

Deals

[EQUITIES] ‘Mirae Asset’s PCA acquisition to buoy stock price’

  • PUBLISHED :November 11, 2016 - 11:20
  • UPDATED :November 11, 2016 - 11:22
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[THE INVESTOR] Mirae Asset Life Insurance will enjoy a synergy effect in variable insurance from its acquisition of PCA Life Insurance, said analysts on Nov. 11. 

“PCA is a relatively small company but its reserves in variable insurance amount to 3.8 trillion won (US$3.26 billion), the seventh-largest in the industry,” said Lee Byeong-geon, an analyst at Dongbu Securities. Combined with that of Mirae Asset, it will be the fourth largest at 9.6 trillion won, he added. 

As PCA has 5.2 trillion in assets and 4.9 trillion won debt, the merger will have little effect on risk-based capital, and Mirae Asset will secure 30 percent rise in earning power and sales channel, said Lee, calling the merger decision a “huge favorable factor.”

Yuanta Securities Korea agreed that the acquisition will create synergy and boost efficiency. 

“This merger will not only increase revenue but also will be favorable in terms of bracing for the upcoming change in the system and stronger regulations,” said analyst Jeong Jun-seob. 

“Considering the size of Mirae Asset Life Insurance’s equity capital (2.1 trillion won) the merger price is not much of a burden,” added the analyst. 

By Hwang You-mee (glamazon@heraldcorp.com)

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