] China’s Anbang Insurance Group will complete its takeover of Germany’s Allianz Life Insurance based in Seoul this week as South Korea’s top financial regulator is expected to approve changing the largest shareholder of the German insurer on Dec. 28.
According to a senior official at the Financial Services Commission on Dec. 27, the regulator will endorse Anbang Group Holdings as a new shareholder of the Seoul-based Allianz, allowing the Chinese financial institution to acquire a full 100 percent stake in the German insurer.
Anbang Group Holdings is a Hong Kong-based paper company founded by Anbang in order to purchase the German company. It applied for the approval in April after signing a deal to purchase the German firm for 3.6 billion won.
It took longer than expected for the FSC to grant approval for the acquisition, since China’s insurance authority was reportedly not cooperative on transferring information about the paper company.
“The financial authorities held thorough deliberations on the Anbang Holdings since it is a different entity from Anbang Life Insurance,” said the FSC official.
Anbang Holdings also applied for FSC approval to take over a 33.3 percent stake in Tong Yang Life Insurance in late November. Tong Yang is currently owned by Anbang Life Insurance with a 63.02 percent stake. The shareholder announced issuance of new shares to raise about 600 billion won worth of capital in early November.
“The FSC will approve Anbang Holdings to win the biggest shareholder position at both Allianz and Tong Yang on Wednesday,” the official said. “It is seen as a move by the Chinese financial titan to unify its governance of the two Seoul-based firms.”
Due to Anbang Holdings’ application for the stake ownership in Tong Yang, market speculations about a merger between Allianz and Tong Yang are gaining grounds.
“Considering the conditions in the Korean life insurance market, it would be more efficient and profitable for Anbang to merge the two life insurers,” said an industry insider on condition of anonymity. “Their business strategies are expected to be pretty much similar, focusing on sales of bancassurance products amid the low interest rates.”
According to Allianz Life Insurance’s Seoul branch, the German-originated life insurer will undergo major changes after the FSC approval is finally made.
“Like seen in the Tong Yang case, the bancassurance business is one of key areas the Chinese owner may want to enhance in order to raise sales,” said Lee Bong-chul, head of the communications department at the company. “The corporate culture is also expected to change a lot under the new ownership.”
The German life insurer will have to ditch its long-held brand name and make a new one.
“The board is carefully mulling over making a new brand,” Lee said. “The company would announce the new brand name early next year.”
By Song Su-hyun/The Korea Herald (firstname.lastname@example.org