KB Insurance considers sale of LIG

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KB Insurance considers sale of LIG

KB Insurance, a unit of KB Financial Group, is preparing to sell LIG Investment & Securities, according to local media reports.

KB Insurance is said to be in the process of picking out deal managers for the sale, and has already sent requests for proposals to major brokerages, the Korea Economic Daily said citing financial industry sources.

KB Insurance owns 82.4 percent of LIG Investment & Securities, having acquired the brokerage when KB Financial Group bought out then-LIG Insurance late last year.

LIG Investment & Securities had been a unit of LIG Insurance, and was re-named KB Insurance after its acquisition by KB Financial Group.

By capital market regulations, an insurance company cannot maintain a financial company unrelated to the insurance business. KB Insurance has until next year to sell LIG Investment.

KB Financial Group could have merged the brokerage with its own brokerage unit, KB Investment & Securities.

“KB Financial may have decided it does not have much to gain from the brokerage unit’s merger with LIG Investment,” an analyst said, declining to be named due to the sensitivity of the issue.

Preliminary bidding is expected in September, and the deal is expected to fetch around 150 billion won ($130 million).

If LIG Investment & Securities is put up for sale, it will not be the only brokerage on the local M&A market this year.

KDB Daewoo Securities, Leading Investment & Securities and eBest Investment Securities are also expected to be up for sale later this year.

KDB Daewoo Securities expected to draw particular interest as it is one of the major brokerages in the country, with the Korea Development Bank holding a 43 percent stake.

There are rumors that KB Financial is interested in acquiring KDB Daewoo.

Meanwhile, medium-sized financial companies including DGB Financial Group and JB Financial Group are said to be interested in buying LIG Investment & Securities.

BY PARK JUNG-YOUN [park.jungyoun@joongang.co.kr]
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