KDB Financial Group to Take Over Kumho Life

The KDB Financial Group yesterday said it will take over Kumho Life and raise its ranking in the domestic non-life insurance industry from eighth to one of the top five.

The group also put more pressure on the owning family of the financially troubled Kumho Asiana Group, saying, “In principle, they must give up their homes as well (to compensate for losses).”

KDB Financial Group Chairman and Korea Development Bank President Min Euoo-sung told The Dong-A Ilbo at the bank’s main office in Seoul yesterday, “We plan to take over Kumho Life and make it an affiliate.”

“Acquisition of Kumho Life as an affiliate will allow us to expand our long-term deposit base needed for long-term loans including project financing, and secure a stable portfolio as a financial holding company,” he said, adding, “This will also be helpful to the eventual privatization of the KDB Financial Group.”

“If we take over Kumho Life, we will raise its ranking from eighth in the industry to one of the country’s five biggest non-life insurers.”

On the method of acquisition, the most likely scenario is that a private equity fund mobilized by the bank, Consus Asset Management and the National Pension Fund will take over the company first and then sell it to the group.

On the sale of Daewoo Engineering & Construction, Min said, “Apart from previously known bidders including Dongkuk Steel Mill, many other investors have expressed interest,” showing confidence in a successful sale.

“We don’t want to sell to an investor just because it is willing to pay top dollar. A major criterion in picking a buyer is whether it can create a synergistic effect when merging with Daewoo Engineering & Construction. We expect to give you good news within a month.”

Min also announced the group’s plans to enter the Southeast Asian market. “To enter the Southeast Asian market, we are considering buying a Thai bank. If successful, it will be a major deal. In addition to the Thai bank, we are taking steps to buy an Indonesian bank, and are considering entering the Indian market as well,” he said.

He said he wants to conclude his bank’s advance into Thailand and India, and then do the same in another country before his term ends in June 2011.

peacechaos@donga.com