Woori Financial Group received conditional approval from South Korea’s top financial regulator to acquire Tongyang Life Insurance and ABL Life Insurance, overcoming regulatory hurdles that threatened to derail the 1.55 trillion won ($1.1 billion) deal.
The Financial Services Commission greenlit the transaction on Friday after an eight-month review, despite Woori’s March downgrade to a management rating that typically precludes mergers. The transaction adds approximately 52 trillion won in assets to Woori’s portfolio, bringing the group’s total assets to nearly 600 trillion won ($427 billion).
The approval comes with three requirements: strengthened internal audit controls, improved corporate governance, and a restructured financial framework. These conditions follow heightened scrutiny of Woori after a 35 billion won illegal loan scandal involving relatives of its former chairman emerged last year.
The acquisitions represent a strategic pivot for Woori, which currently derives over 90% of profits from banking operations. The company will pay 1.28 trillion won for a 75.34% stake in Tongyang Life and 265.4 billion won for full ownership of ABL Life from China’s Dajia Insurance Group.
For Woori Chairman Yim Jong-yong, who took the helm in March 2023, the deal marks a full-circle moment. A decade ago, as NH Financial Group chairman, Yim orchestrated the acquisition of Woori’s investment banking arm, leaving the company heavily dependent on commercial banking.
Analysts expect Woori to eventually merge the two insurance units to streamline operations and create synergies with Woori Investment & Securities, which launched last August. Market watchers caution that successful integration will require deft execution and sustained regulatory compliance as Yim faces pressure to resign before his term ends next year.
