Preferred Negotiation Partner to Be Selected Soon
Hanwha Life Insurance and Heungkuk Life Insurance have submitted bids in the main auction for the acquisition of Aegis Asset Management, the largest real estate asset management company in South Korea.
According to the financial investment industry on November 11, Hanwha Life Insurance and Heungkuk Life Insurance reportedly submitted their final acquisition proposals in the main auction for the sale of management rights of Aegis Asset Management held on the same day. The sale is being managed by foreign investment banks Goldman Sachs and Morgan Stanley.
Previously, in the preliminary bidding held in August, Hanwha Life Insurance, Heungkuk Life Insurance, and two foreign private equity fund managers were included in the shortlist of qualified bidders. Among them, at least Hanwha Life Insurance and Heungkuk Life Insurance are known to have participated in the main auction.
The stake up for sale consists of more than 60%, including the 12.4% held by Sohn Hwaja, the spouse of the late founder and Chairman Kim Daeyoung, as well as shares held by financial investors. Some market observers speculate that if shares held by Daishin Financial Group and former New Business Development Division Head Jo Gapju are included, the stake for sale could increase to as much as 98%.
The market sees these insurance companies' bids as an effort to offset the slowing profitability of their core businesses by acquiring a promising alternative investment vehicle in the form of a real estate asset management company.
Hanwha Life Insurance, led by Kim Dongwon, the second son of the third generation of Hanwha Group's owner family, has reportedly been proactive in its pursuit of Aegis Asset Management from an early stage. Heungkuk Life Insurance, an insurance affiliate under Taekwang Group, is also said to have shown strong acquisition intent, seeking synergy with Aegis Asset Management as part of its business diversification strategy.
The bid prices have not been disclosed. However, the market is valuing Aegis Asset Management at between 800 billion and 1 trillion won.
In the main auction, not only the proposed price but also the structure of financing will be comprehensively evaluated, and the party with the highest likelihood of closing the deal will be selected as the preferred negotiation partner. After the preferred bidder is selected, a major shareholder eligibility review will take place, and the transaction is expected to be finalized in the first half of next year following the payment of the remaining balance.
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