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China Taiping Offers US$2B For ING Life In Bid For Largest-Ever South Korean Insurer Deal

China Taiping Insurance Group Ltd. has offered about 2.5 trillion South Korean won, or US$2.14 billion, for the whole of Seoul-based ING Life Insurance Korea Ltd., while the private equity firm that owns the closely-held target company is seeking a valuation twice as high, a person with direct knowledge of the matter told S&P Global Market Intelligence. A deal at the bid's level would still be the largest ever involving a South Korean insurer.

China Taiping is among several Chinese companies that submitted preliminary bids before a May 28 deadline, the person said. Representatives from China Taiping and other suitors are currently meeting with ING Life executives as part of a two-month due diligence process, the person said. Final bids are due in August.

There will be more acquisition opportunities for them in South Korea.
MBK Partners Ltd., a South Korean private equity firm that acquired ING Life from ING Groep NV in December 2013 for US$1.74 billion, values the business at about 5 trillion won, based on an assessment by actuarial and consulting firm Milliman, the person said.

ING Life held 4.261 trillion won in total equity at the end of 2015, the fourth-largest amount among South Korean insurers, according to its 2015 annual report.

China Taiping and Milliman declined to comment, while MBK Partners was not immediately available for comment.

In addition to China Taiping, China Life Insurance (Group) Co., JD Capital Co. Ltd., Ping An Insurance (Group) Co. of China Ltd. and Anbang Insurance Group Co., all based in China, have participated in the first round of bidding, according to South Korean media.

An acquisition of ING Life by any of those potential buyers would expand the Chinese presence in South Korea's insurance industry, which has become less attractive for local companies because of looming tougher capital rules.

Kyobo Life Insurance Co. Ltd. is the only known South Korean suitor for ING Life. The company has been eliminated because its offer was too low, according to reports.

Anbang, which has been on a global acquisition spree in recent years, bought TONGYANG Life Insurance Co. Ltd. in 2015 and is seeking regulatory approval to take over the South Korean life insurance unit of Allianz Group.

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Chinese insurers are looking overseas as they face challenges at home, where a rule change is forcing them to boost reserves and seek higher-return assets at a time when it is becoming harder to increase earnings from investments. Domestic stock prices have been sliding, with yields on debt holdings also in decline amid monetary easing.

There will be more acquisition opportunities for them in South Korea.

Korea Development Bank has unveiled a plan to auction KDB Life Insurance Co. Ltd.this year, while Prudential Plc, according to reports, is expected to sell its South Korean life insurance business, PCA Life Insurance Co. Ltd.

As of June 30, US$1 was equivalent to 1,155.40 South Korean won.