Dutch insurer ING offloads its South Korean unit to MBK Partners

Dutch insurer ING edged closer to completing its year-and-a-half-old Asian divestment plan after private equity firm MBK Partners agreed to buy its South Korean insurance unit for 1.84 trillion won (HK$12.82 billion) in cash.

Under the agreement announced yesterday, bailed-out ING will retain a stake of about 10 per cent in the Korean unit and allow MBK to use the ING brand for up to five years.

The sale of the Korean unit will leave ING with its Japan insurance unit left to sell, bringing it closer to fulfilling its agreement with European regulators to offload more than 50 per cent of its Asian operations by the end of this year.

Since its rescue in 2008, ING has dismantled its once-fashionable banking and insurance model and announced thousands of job cuts and other cost savings. ING has raised about €23 billion (HK$238 billion) from divesting insurance, investment management and other assets to repay state aid.

ING will own a 120 billion won stake in the Korean unit, confirming an earlier report.

"I am convinced that with the support of MBK Partners, ING Life Korea will continue to grow its customer offering and build on its position as the fifth-largest insurance company in the Korean market," ING chief executive Jan Hommen said in a statement.