이 기사는 2019년 12월 03일 08:00 thebell 에 표출된 기사입니다.

As mid-sized Prudential Life Insurance Company of Korea is up for grabs, market is paying attention to large-sized private equity (PE) firms if they participate in the deal with their ample funds amid scarcity of big-ticket deals.

According to M&A industry sources on November 28, Prudential Financial, the number one U.S. life insurer, has hired Goldman Sachs as a lead manager for the sale of its South Korean unit, and contacted potential buyers. Market watchers say it is likely that large-sized PE firms which have high levels of dry powder in their blind-pool funds may explore the possibility of the acquisition. Although the sell-side just kicked off the process, the industry is paying keen attention to potential buyers of this trillion-won-size deal.

Some view South Korea’s large financial firms that aim to enhance their non-bank businesses as potential bidders while others say that financial investors can’t be ruled out. Large-sized PE firms which have high levels of dry powder and have track records of acquiring or investing in financial firms are considered potential buyers. The industry is paying attention to Hahn & Company and IMM Private Equity and STIC Investments.

So far PE firms have showed strong interests in financial firms whenever they are up for sale. For example, MBK Partners acquired ING Life Insurance, currently Orange Life, in 2013 and sold to Shinhan Financial Group last year. More recently, the largest PE firm in Korea acquired Lotte Card in a consortium with Woori bank. MBK Partners also had HK Savings Bank and Hanmi Capital as portfolio companies.

Foreign PE firms, which have ample funds compared to domestic PE firms, are also considered potential buyers. Still, their participation in the deal might be limited due to stricter rules. Accordingly, potential buyers are more likely to be narrowed down to major domestic PE firms.

IMM PE is considered as one of the potential buyers due to its strength in investing in financial firms. IMM PE invested in K bank and Woori Financial Group to become major shareholder. The PE firm is also cash-flush with the firm recently raising the fourth flagship fund.

Hahn & Company has a good understanding of financial sector after it participated in the Lotte Card deal and selected as the preferred bidder although the firm failed to strike a deal with the card company. The PE firm also has a high level of dry powder with the firm creating a 3.8 trillion won blind fund last month.

STIC Investments hasn’t invested much in financial firms, before it became the second largest shareholder of Carrot, the first digital nonlife insurance firm backed by Hanwha General Insurance, SK Telecom and Hyundai Motor. STIC Investments invested around 15 billion won in Carrot. STIC Investments has a high level of dry powder in its 1.2 trillion won Special Situation Fund (SSF) II.

(By reporters Kim Hye-ran and Han Hee-yeon)