By Jonathan Cheng in Seoul and Alec Macfarlane in Hong Kong 

Asian private-equity firm MBK Partners LP is kicking off the sale of one of South Korea's largest life insurers in a deal that could fetch more than $3 billion, according to people familiar with the situation.

MBK has hired Morgan Stanley to shop its stake in ING Life Korea, South Korea's fifth-largest insurance company by assets, with financial information set to go out to potential bidders this week, the people said.

The sale process is expected to generate interest from a mix of Chinese and South Korean insurance companies, they said. Potential bidders could include South Korea's No. 2 and No. 3 players, Hanwha Life Insurance Co. and Kyobo Life Insurance Co., as well as China's Ping An Insurance (Group) Co., according to the people. could reap a tidy profit on the sale of ING Life Korea after buying it from the Dutch parent company in 2013 for $1.6 billion.

Chinese buyers, led by Beijing-based insurer Anbang Insurance Group Co., have shown interest in tapping the South Korean market at a time when some Western insurers are selling out. Anbang purchased the South Korean operations of Germany's Allianz SE earlier this month for about $3 million and won control of South Korea's No. 8 insurer Tong Yang Life Insurance Co. last February for $1 billion.

Beijing-based Anbang turned heads last month when it offered $14 billion for Starwood Hotels & Resorts Worldwide Inc., before abruptly dropping the bid. Anbang, founded in 2004, paid nearly $2 billion in October 2014 for the Waldorf Astoria hotel in Manhattan.

ING Life Korea, which has about 30 trillion Korean won ($2.6 billion) in assets, would be a richer prize than Tong Yang or Allianz's Korean life insurance business, offering a book value of about 4.3 trillion won ($3.7 billion) and, for Chinese insurers, exposure to the relatively complex insurance products that ING sells in South Korea. ING Life Korea's net income rose 36% last year to 305 billion won.

MBK is seeking to have letters of intent from bidders by the end of May, according to the people.

The Asian private-equity firm acquired ING Groep NV's South Korean unit in 2013 as part of a planned shrinking of the Amsterdam-based financial giant ordered by the European Commission after ING was rescued with a EUR10 billion ($11.3 billion) bailout in 2008. ING retained a 10% stake in the South Korea operation after the 2013 sale.

MBK, which invests in South Korea, Greater China and Japan, was set up in 2005 by a team of former executives from Carlyle Group LP led by Michael Kim, who previously directed the U.S. buyout giant's private-equity activities in the Asia-Pacific region. MBK, which has $10.1 billion of capital under management, is currently in talks with investors about raising up to $4 billion for a new buyout fund, The Wall Street Journal previously reported.

Last September, MBK led a consortium of investors that included the Canada Pension Plan Investment Board and Singapore state investment firm Temasek Holdings Pte. Ltd. to acquire British supermarket chain Tesco PLC's South Korea business, known as HomePlus, for $6.1 billion.

Write to Jonathan Cheng at jonathan.cheng@wsj.com and Alec Macfarlane at Alec.Macfarlane@wsj.com

 

(END) Dow Jones Newswires

April 26, 2016 16:14 ET (20:14 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
ING Groep NV (NYSE:ING)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more ING Groep NV Charts.
ING Groep NV (NYSE:ING)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more ING Groep NV Charts.