Why did China’s Anbang Insurance take over Allianz Global Investors?

The Financial Services Commission (FSC) of Korea approved China-based Anbang Insurance on September 25 to change a major shareholder for the acquisition of Allianz Global Investors Korea.

With China’s Anbang Insurance closing the acquisition of Allianz Global Investors Korea Limited on September 26, all eyes are on becoming the largest foreign bank investment firm in South Korea.

According to investment banking industry sources, on September 27, the Korean Financial Services Commission (FSC) finally agreed to China-based Anbang Insurance to change a major shareholder for the September 25 acquisition of Allianz Global Investors Korea Korea with 100 percent of the shares. A purchase price was not disclosed.

In April last year, Anbang Insurance signed a share purchase agreement with the German Allianz Group to take over the South Korean businesses of Allianz – Allianz Life Insurance Korea and the asset management company Allianz Global Investors Korea. Allianz Life changed its name to ABL Life in August. However, unlike Allianz Life, the takeover of Allianz Global Investors Korea was delayed by over a year.

With China continuing economic retaliation for deploying the US THAAD anti-missile defense system in South Korea and the arrest of Anbang Insurance Chairman Wu Xiaohui, China’s financial authorities are expected to postpone approval. Recently, some foreign media outlets said that there are rumors that the Chinese government has ordered companies making massive overseas investments to sell their overseas assets, and Anbang Insurance is expected to be affected.

In one specific situation, Anbang Insurance has sought approval from China and South Korea to acquire Allianz Global Investors Korea and cleared the rumors and concerns. However, some say the delayed acquisition hurt Allianz Global Investors Korea’s competitiveness, and Anbang Insurance bought the company at a bargain price.

Meanwhile, Anbang Insurance has aggressively expanded in size by acquiring Allianz Global Investors Korea this year, following Tongyang Life Insurance and Tongyang Asset Management in 2015 and Allianz Life (ABL Life) in 2016.

According to the Korea Life Insurance Association, initial premium sales of bancasurance managed by 25 life insurers were 3.87 trillion won ($ 3.38 billion) at the end of June this year. ABL Life and Tongyang Life initial premium sales reached 907.4 billion won ($ 792.84 million) or 23.48 percent and 811.9 billion won ($ 709.39 million) or 20, respectively. 01 percent. The combined sales of the two companies accounted for 44.49 percent of total sales.

Anbang Insurance expects his experience of investing in ABL Life and Tongyang Life to be beneficial to Allianz Global Investors Korea in the future. A South Korean official from Anbang Insurance said, “We will operate two life insurance companies and two asset management companies in the South Korean market and will contribute to the growth of the domestic financial industry in the future.”

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