Woori Financial Group said on April 8 it acquired China-based Anbang Insurance Group’s local subsidiaries in South Korea -- Tongyang Asset Management and ABL Asset Management -- its first acquisitions as a holding company.
Woori Financial signed a share purchase agreement for the two asset management companies on April 5.
The Korean financial institution paid 123 billion won ($107 million) for 73 percent stake in Tongyang Asset to Tongyang Life and an estimated 47 billion won for 100 percent of ABL to Anbang Asset Management.
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The buyout is part of Woori Financial’s efforts to expand its nonbanking operations and reduce its reliance on Woori Bank. Despite having 23 subsidiaries, almost 99 percent of the group’s portfolio relies on the banking unit.
“Starting with this acquisition, we will expand our portfolio to add REITs, capital, saving banks as well as securities firms and insurance companies so as to strengthen our nonbanking businesses and reinforce our compatibility as a comprehensive financial group,” Woori Group Chairman Sohn Tae-seung said.
The assets under management of Tongyang Asset Management and ABL Asset stood at 21.5 trillion won and 8.1 trillion won, respectively, as of April 8. Armed with these two AMCs, Woori will enter the list of top 10 AMCs in Korea.
“Wealth management business has more than 10 percent return on equity and is expected to see stable growth in the future given the aging population,” a company official said.
The agreement also marks the first sale of Anbang Insurance Group’s assets in the country since it fell under government control in February 2018 citing the company's illegal activity. The Chinese government has been seeking to sell Anbang's overseas assets to shore up its balance sheet.
Tongyang Life and ABL became Anbang subsidiaries when their parent companies were sold to it in 2015 and 2016, respectively.
By Park Ga-young (email@example.com)