Woori Financial pulls out of Lotte Insurance bid

Lotte Insurance headquarters in central Seoul [LOTTE INSURANCE]

Woori Financial Group decided to pull out of the bidding race for Lotte Insurance, a non-life insurer.

“We have considered acquiring a stake in Lotte Insurance as part of our group-wide initiative to enhance the competitive edge in the non-banking sector, but decided against it,” the financial firm said in a regulatory filing Friday.

Instead, Woori Financial Group said on the previous day that it is considering acquiring Tongyang Life Insurance and ABL Life Insurance, and has recently signed a nonbinding agreement with DaJia Insurance Group from China, the largest shareholder of the insurers.

“Regarding the potential acquisition of Tongyang Life Insurance and ABL Life Insurance, which is proceeding separately [from the halted Lotte Insurance acquisition], we will make a public announcement when details are settled or within a month,” Woori Financial Group said.

Woori Financial Group, seeking to diversify its portfolio to reduce its reliance on the banking business, participated in the preliminary bidding in April to acquire JKL Partners' 77 percent stake in Lotte Insurance.

The disagreement over the price reportedly stalled the negotiation. JKL Partners offered a price range between 2 to 3 trillion won, while Woori was aiming for a price below 2 trillion won.

Lotte Insurance's share price, which hit a 52-week high of 4,090 won on Wednesday ahead of the main bidding, took a steep plunge in the market, closing at 2,915 won, down 23.59 percent from the previous trading day. Its market cap stood at 904.6 billion won.

On the other hand, Tongyang Life Insurance soared to a new 52-week high on Friday, climbing 8.61 percent to close at 7,820 won. Woori Financial Group inched up 1.66 percent to 14,690 won.

Woori Financial Group posted a net profit of 2.63 trillion won last year. Lotte Insurance logged 301.6 billion won in net earnings, Tongyang Life Insurance 270.6 billion won and ABL Life Insurance 79.9 billion won.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]