Woori Financial Group, one of South Korea’s five financial holding companies, is poised to become the new owner of Tongyang Asset Management and ABL Asset Management, subsidiaries of two Anbang Insurance Group-owned insurance companies, industry sources said on March 22.
Woori has been selected as a preferred bidder for the two asset management companies put up for sale as part of the Chinese government’s plans to divest troubled Anbang’s overseas assets. Beijing took control over Anbang in February 2018.
Tongyang Life, ABL Life seek new owners
Woori Financial poised for M&A binge
Woori has offered 170 billion won ($150 million) for the two firms belonging to Tongyang Life and ABL. Tongyang Asset Management’s assets stood at 99.4 billion won as of end-September, making it the 13th-largest asset manager, while ABL ranked 43rd with 35.1 billion won in assets. Combined, it would become the eighth largest AMC in Korea.
Tongyang Asset is 73 percent owned by Tongyang Life and 27 percent by Yuanta, while ABL is wholly owned by Anbang Asset Management.
Tongyang Asset and Tongyang Life became Anbang subsidiaries when their parent companies were sold to the Chinese company in 2015 and 2016, respectively.
The acquisition would help Woori Financial, which recently changed back into a financial holding company, expand its portfolio beyond Woori Bank. Despite having 23 subsidiaries, almost 99 percent of the group’s portfolio relies on the banking unit. With the two AMCs, it is expected to reinforce its nonbanking and financial investment sectors.
Currently, Woori Financial has only two investment units -- Woori PE Asset Management and Woori Investment Bank -- after selling Woori Investment and Securities and Woori Aviva Life to NH Financial Group in 2014 as part of the government’s privatization process of Woori Bank.
“Once it successfully wraps up the acquisition, Woori Financial can reduce its reliance on Woori Bank while also creating synergies with other subsidiaries, which is what other financial holdings groups are doing,” an industry source said on the condition of anonymity.
When Woori Financial was launched in January, Chairman Sohn Tae-seung vowed to strengthen its nonbanking portfolio by acquiring small AMCs, savings banks as well as real estate investment trusts within a year.
Meanwhile, Woori Financial has withdrawn from a bid for Hi Asset Management.
By Park Ga-young (firstname.lastname@example.org)