April 23, 2024

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Woori Financial Group announced on April 3 that it has signed a memorandum of understanding with family-owned Kukje Trust’s major stakeholders to acquire it.

Woori Financial Group Chairman Sohn Tae-seung

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Woori Financial is looking for legal and accounting advisors for the forthcoming due diligence, according to Woori Bank spokesperson. Details of the ongoing negotiations, such as plans for due diligence and sales and purchase agreement, will materialize subsequently.

“Real estate asset trust firms boast high growth potential and unique profitability, so (Woori) expects more active intragroup synergy effects with its subsidiaries,” the banking group said in a statement.

“If the deal goes through, Kukje will play a central role in the group-wide real estate financing business,” it added.

The announcement came amid speculations that NongHyup Financial Group, which fell short of gaining a license to add a property asset trust firm under its umbrella, is also in the acquisition race. The firm has denied the speculations.

Founded in 2007, Kukje Trust logged 31.5 billion won ($27.76 million) net profit last year. It has 23.6 trillion won assets under management, the ninth-largest out of 11 domestic realty asset management firms.

Kukje Chairman Yoo Jae-eun and his daughter own a combined 65.7 percent. Woori Bank, the financial group’s banking subsidiary, also currently owns 6.5 percent.

The announcement marks Woori’s step forward to add another subsidiary in the portfolio of the banking group’s holding firm created this year. Woori was earlier selected as a preferred bidder for acquisition of Tongyang Asset Management and ABL Asset Management, indirect subsidiaries of Anbang Insurance Group.

By Son Ji-hyoung (consnow@heraldcorp.com)