Woori Financial's Return to Insurance: Acquires Dongyang Life and ABL Life for 1.5 Trillion Won

Woori Financial Group has decided to acquire Dongyang Life and ABL Life, marking its return to the insurance industry after a decade.

Woori Financial Group has decided to acquire Dongyang Life and ABL Life, marking its return to the insurance industry after a decade. This move is seen as a significant step in completing its comprehensive financial group portfolio. This blog post explores the background, process, and future outlook of this acquisition.

On August 28, Woori Financial Group's board of directors resolved to acquire Dongyang Life and ABL Life, signing a stock purchase agreement (SPA). This acquisition marks Woori Financial’s re-entry into the insurance industry for the first time in 10 years since the sale of Woori Aviva Life in 2014.

Acquisition Details and Background

Woori Financial’s acquisition involves a 75.34% stake in Dongyang Life for 1.284 trillion won and a 100% stake in ABL Life for 265.4 billion won, totaling 1.5493 trillion won. The price-to-book ratios (PBR) based on the due diligence date of March 2024 are approximately 0.65 for Dongyang Life and 0.30 for ABL Life.

Dongyang Life is one of the top 6 life insurers in Korea based on premium income, with total assets of 33 trillion won and net income of 300 billion won in 2023, showcasing its stable profit generation capabilities. ABL Life, ranked 9th among medium-sized insurers, reported total assets of 17 trillion won and net income of 80 billion won in 2023, noted especially for its strong asset management capabilities.

Acquisition Process and Procedure

Woori Financial has been actively pursuing acquisitions of insurance companies to complete its comprehensive financial group. Starting in May 2023, the company engaged in formal negotiations with China’s Multi-Insurance Group, securing exclusive negotiation rights and proceeding to due diligence after signing an MOU in June. Over a two-month period, valuation was determined through consultations with accounting, actuarial, and legal experts, followed by negotiations on price and transaction terms.

Once the necessary procedures are completed, and Dongyang Life and ABL Life are integrated as subsidiaries, Woori Financial will finalize its comprehensive financial group portfolio, including Woori Investment & Securities, which launched this month, covering banking, securities, and insurance sectors.

Future Challenges and Outlook

The final hurdle is obtaining approval from financial regulators. To complete the acquisition of Dongyang Life and ABL Life, Woori Financial must pass the eligibility review for major shareholders, which includes not having received regulatory warnings in the past year.

A Woori Financial representative stated, "The exact date for the stock acquisition is currently undetermined and will be confirmed based on the progress of regulatory approvals and related schedules."

Woori Financial Group’s acquisition of Dongyang Life and ABL Life represents more than just a return to the insurance sector—it is a crucial step towards completing its comprehensive financial group strategy. If regulatory approvals are successfully obtained, Woori Financial will strengthen its business portfolio significantly. The industry will be watching closely as Woori Financial moves forward with this major acquisition.