Woori Financial Group has resolved to acquire Dongyang Life Insurance and ABL Life Insurance. Having expanded its portfolio into securities with the establishment of Woori Investment & Securities, the group is now actively entering the insurance sector, which had remained a vacant area. However, since the improper loan incident involving former Chairman Sohn Tae-seung's relatives is still ongoing, even if the acquisition is finalized, there are still hurdles to overcome, such as obtaining approval for the change of major shareholder from financial authorities.
On the morning of the 28th, Woori Financial Group held a board meeting and resolved to acquire Dongyang Life Insurance and ABL Life Insurance, signing a Stock Purchase Agreement (SPA). The acquisition stakes are 75.34% in Dongyang Life Insurance and 100.00% in ABL Life Insurance. The acquisition price totals 1.5492 trillion KRW, with 1.2839 trillion KRW for Dongyang Life Insurance and 265.3 billion KRW for ABL Life Insurance.
Dongyang Life Insurance is a major insurer ranked 6th among 22 domestic life insurance companies based on premium income. As of last year, it had total assets of 33 trillion KRW and recorded a net profit of 300 billion KRW, demonstrating stable profit-generating capability. ABL Life Insurance is also a mid-sized company ranked 9th in the industry, with total assets of 17 trillion KRW and a net profit of approximately 80 billion KRW.
Woori Financial Group has been conducting active negotiations with China’s Dazhong Insurance Group since May to broaden its portfolio with the goal of completing a comprehensive financial group. In June, they signed a Memorandum of Understanding (MOU) securing exclusive negotiation rights and began due diligence. After about two months of due diligence, Woori Financial Group assessed the corporate value and negotiated price and transaction terms with Dazhong Insurance Group, culminating in the signing of the SPA on this day.
Once Woori Financial Group incorporates Dongyang Life Insurance and ABL Life Insurance as subsidiaries, together with Woori Investment & Securities, which launched on the 1st, it will complete its business portfolio as a comprehensive financial group covering banking, securities, and insurance. This is expected to activate linked operations among affiliates.
In particular, after the acquisition, the expansion of non-bank sector revenue will improve the bank dependency ratio, which currently stands at around 90%, thereby significantly contributing to enhancing shareholder value. A Woori Financial Group official stated, "The signing of this SPA is the first step toward acquiring insurance companies. Since final acquisition requires regulatory approval, we will continue to diligently follow the procedures."
However, uncertainties remain. The timing coincides with the intensification of the fallout from the improper loan incident involving former Chairman Sohn’s relatives. According to the current Financial Company Governance Act supervisory regulations, to become the largest shareholder of a financial company, there must be no record of institutional warnings in the past year or corrective orders, suspension orders, or business suspension measures in the past three years.
Financial authorities are considering strong sanctions. Lee Bok-hyun, Governor of the Financial Supervisory Service, recently stated, "Someone must take responsibility. We will activate the maximum possible legal measures to proceed with audits and sanctions." There is also speculation that the review for the change of major shareholder could be delayed until the sanction procedures related to the incident are completed.
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