Dajia Insurance likely to put Korea's ABL Life up for sale again

China’s Dajia Insurance Group Co. seeks to divest of a full stake in its South Korean subsidiary ABL Life Insurance Co. with an estimated value of 300 billion won to 400 billion won ($230.4 million to $307.2 million), according to investment banking sources on Dec. 8. 

Korea’s Woori Financial Group, which is considering buying VC firm Daol Investment, is among potential bidders alongside some private equity firms, sources said.

Dajia has tapped Korea’s premier law firm Kim & Chang as legal advisor for the sale and is slated to select a lead manager, The Korea Economic Daily found. The parent group is understood to be selling off its non-core units, including the Korean insurer.

The Chinese government established Dajia in June 2019 to take over the main operations of Anbang Insurance Group as Anbang’s former chairman Wu Xiaohui was sentenced to 18 years in prison in 2018 for fraud and embezzlement. 

The Chinese authorities failed to sell a 98.8% stake in Dajia last year -- it will attempt the sale again after divesting of the group’s non-core assets, an IB source said.

ABL Life is managing 19.46 trillion won in assets as of end-September with 215% risk-based capital. The total capital amounts to 854.8 billion won as of the third quarter, nearly halving from the same period last year due to losses in debt investment and others.

Given the 0.3-0.5 times price-to-book ratios that Korea’s listed insurers have, the deal value is expected to be between 300 billion to 400 billion won.

ABL Life was originally Cheil Life Insurance, which was founded in 1954. Cheil, Korea’s fourth-largest insurer in terms of asset size in the 1990s, suffered from the 1997-98 Asian financial crisis and was sold to German insurance giant Allianz in 1999. Anbang bought Allianz Life Insurance in Korea for $3 million in 2017 and rebranded it as ABL Life in the same year.

Write to Dong-Hun Lee at leedh@hankyung.com
Jihyun Kim edited this article.