ING to Sell South Korean Insurance Unit for $1.7 Billion

ING to Sell South Korean Insurance Unit for $1.7 Billion

HONG KONG–The Dutch insurer ING Group said Monday it would sell its South Korean life insurance unit to the local private equity group MBK Partners for 1.84 trillion won ($ 1.65 billion).

The deal marks the latest in a string of divestments in Asia for ING, which is seeking to unload its portfolio of insurance and asset management businesses in the region in an effort to raise funds to repay a 2008 bailout by the Dutch government.

‘‘This transaction is a major step in the divestment of our Asian insurance and investment management activities,’’ ING’s chief executive, Jan Hommen, said Monday in a statement announcing the deal. ‘‘This will bring us further into the end phase of the restructuring of our company.’’

The Amsterdam-based company said the sale of ING Life Korea, South Korea’s largest foreign-owned life insurer, with about 1.3 million customers, would result in a post-tax loss of 950 million euros, or about $ 1.3 billion. The deal is expected to close in the fourth quarter of this year.

Under the terms of the deal, ING will retain a 10 percent stake in the South Korean unit, and will continue to provide technical support for a period of one year. A separate licensing agreement will allow MBK to continue to use the ING brand name for up to five years.

MBK is a South Korean private equity firm that was set up in 2005 by former Asia partners at Carlyle Group, an American buyout firm based in Washington. It has over $ 8 billion in capital under management and offices in Hong Kong, Seoul, Shanghai and Tokyo.

The news of the sale of the life insurance unit comes one month after ING said it was selling its asset management business in South Korea to Australia’s Macquarie Group for an undisclosed sum. That unit manages approximately 25 trillion won for local financial institutions, including ING Life Korea.

Last October, ING agreed to sell its Malaysian insurance business to A.I.A. Group, the Asian insurance giant formerly owned by American International Group, in a deal worth about $ 1.7 billion.



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