Lotte Insurance Sale Talks Stall, Public Sale Possible
Shinhan Financial Group and JKL Partners, the largest shareholder of Lotte Insurance, have suspended negotiations over the insurer's potential acquisition by Shinhan after failing to narrow their price gap. The deal is not necessarily off, according to investment banking industry sources. A public s
Negotiations between Shinhan Financial Group, JKL Partners, and Lotte Insurance have halted due to disagreements on price. While the deal is not entirely off, a public sale is being considered as an alternative path forward. Hotel Lotte's 5.02% stake in Lotte Insurance is seen as a crucial factor in the transaction, with the possibility of a drag-along provision potentially increasing JKL Partners' stake.
If a public sale occurs, it could be announced as early as late September, with bidding taking place in late October and a preferred bidder selected by year-end. JKL Partners is seeking a valuation of over 1 trillion won for the entire insurer, while Shinhan Financial has offered around 1 trillion won. The remaining 17.63% of Lotte Insurance's shares are held by minority and employee shareholders.
A new controlling shareholder could face challenges in maintaining Lotte Group's business relationship and strengthening the insurer's capital base to meet solvency requirements by 2027. Potential buyers include Hana Financial Group and other insurers seeking to expand in the insurance sector.
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