ING announced this Monday that it has reached an agreement to sell ING Life Korea, its wholly owned life insurance business in South Korea, to MBK Partners for a total purchase price of approximately KRW 1.84 trillion (1.6 billion USD at current exchange rates). Under the terms of the agreement, ING will hold an indirect stake of approximately 10% in ING Life Korea for an amount of KRW 120 billion (106 million USD at current exchange rates).
ING has also reached a licensing agreement that will allow ING Life Korea to continue to operate under the ING brand for a maximum period of five years. In addition, over the course of one year, ING will continue to provide technical support and advice to ING Life Korea.
ING has made great strides in delivering on its programme to divest its insurance businesses as announced in 2009. Since then, ING has sold its insurance and investment management operations in Canada, Australia & New Zealand and Latin America, and a large portion of its insurance and investment management activities in Asia. In May 2013, ING’s U.S.-based retirement, investment and insurance business was successfully listed on the New York Stock Exchange, reducing ING’s stake to approximately 71%.
ING has accelerated preparations for the IPO of its European insurance and investment management businesses to be ready to go to market in 2014. The process to divest the remaining insurance and investment management businesses is on-going and any further announcements will be made if and when appropriate.
Transactions Details
MBK Partners is executing the transaction announced today through Life Investment, a private equity fund and will manage the investment in ING Life Korea for MBK Partners as well as for other investors in the fund. As part of the transaction, ING will hold an indirect stake of approximately 10% in ING Life Korea for an amount of KRW 120 billion (EUR 80 million at current exchange rates) which will be held by ING Insurance (ING Verzekeringen N.V.). As previously announced, the proceeds of the transaction will be used to further reduce the debt of ING Insurance.
The transaction announced today is subject to regulatory approvals and is expected to close in the fourth quarter of 2013. It does not impact ING’s Commercial Banking activities in South Korea.