Fubon Financial eyes controlling stake in South Korean joint venture
Taipei, April 21 (CNA) Fubon Financial Holding Co., one of the leading financial holding firms in Taiwan, has decided to raise its investments in a joint venture life insurance firm in South Korea, expressing optimism toward the East Asia country's life insurance market.
Fubon Financial said it is planning to raise its stake in Hyundai Life Insurance Co. to 62 percent from the current 48 percent through its wholly owned subsidiary Fubon Life Insurance Co.
To raise its stake in the joint venture, Fubon Financial said, Fubon Life will invest about NT$6.4 billion (US$218 million) in Hyundai Life through a South Korean firm's rights issue, to boost its total investments in the joint venture to NT$12.4 billion.
After gaining the controlling stake and taking more than half of the seats in the 11-member board of directors, Hyundai Life will be renamed Fubon Hyundai Life Insurance Co., Fubon Financial said.
In December 2015, Fubon Life completed a deal to acquire the 48 percent stake in Hyundai Life from Hyundai Motor Group to become the second largest shareholder of the joint venture.
The deal has been described as a move to boost Fubon Life's presence in the East Asia market, in line with Taiwan's government policies to encourage local financial institutions to expand regionally through mergers and acquisitions.
Currently, Fubon Life owns five seats on the board of directors, while Hyundai Motor holds the remaining six.
As one of the largest life insurers in Taiwan, Fubon Life has ambitions to contribute its experience in overseas investments to help strengthen Hyundai Life's investment returns and lower investment risks, Fubon Financial said.
It has set a goal to turn the joint venture into one of South Korea's top 10 insurers by 2020.
The proposal to raise its stake in Fubon Financial is scheduled to receive a review in a board meeting scheduled for April 26, and if approved, the company will seek regulatory approval in Taiwan and South Korea. Fubon Financial said the deal is expected to be completed in the second half of this year.
The financial holding said it is expected to take the positions of the executives in the joint venture, including the president, the chief risk controlling officer and chief financial officer, the chief actuary as well as other ranking officials.
Fubon Financial said the company has built a broad presence in the greater China area, and now the East Asia market has become one of the targets to extend its reach in the region.
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