Chinese group may buy life insurer

Tong Yang Life Insurance is likely to be taken over by a Chinese insurance magnate, according to the financial industry on Monday.

An insider at Vogo told local media that the private equity fund is in talks with Anbang Insurance Group, one of China’s largest insurance companies, to sell Tong Yang.

Vogo is the largest shareholder of the Korean insurer.

“Talks are under way with several companies that are interested in Tong Yang,” the insider was quoted as saying. “Among them, much progress has been made with Anbang.”

But it is too early to say the deal will be consummated, because there are critical matters that must be discussed further, the official said.

Vogo owns 57.5 percent of Tong Yang, the eighth-largest life insurance company in Korea with 18 trillion won ($16.3 billion) in assets.

Tong Yang’s life insurance unit recorded 4.2 trillion won in sales and 121 billion won in operating profit last year, its best performance ever. Net profit was 164.4 billion won, also a record high.

Some in the market say China’s Anbang Insurance Group already has agreed to buy a controlling stake in Tong Yang for 1.1 trillion won, according to some media reports.

If Anbang acquires Tong Yang, it would be the first case of Chinese capital buying a Korean financial company.

Anbang Insurance Group, established in 2004, has about 126 trillion won in assets. Anbang’s chairman is Wu Xiaohui, who married the granddaughter of the late Deng Xiaoping, the leader of China until 1992. The Chinese financial group bid to acquire Woori Bank last year.

Anbang on Monday won approval in the Netherlands to buy and recapitalize SNS Reaal NV’s former insurance arm.

BY SONG SU-HYUN [ssh@joogang.co.kr]