MG Non-Life Insurance deal falls through with no bidders

The sale of South Korean mid-sized insurer MG Non-Life Insurance Co. has been canceled as the financially distressed insurer failed to attract any bidders on Friday.

Korea’s Dayli Partners and New York-based J.C. Flowers & Co., the private equity firms that participated in the preliminary bid in April and conducted due diligence on it, have dropped out of the deal, investment banking sources said on July 19.

It is the third time the insurer's sale has been canceled amid tepid investor interest.

Seoul-based JC Partners, which owns a 95.5% stake in MG Non-Life Insurance, withdrew the divestment plan with no pre-bid participants in January 2023. The PE firm drew one potential bidder last October, but the bidding didn’t meet the country’s standard for a takeover by the number of bidders.

MG Non-Life Insurance has been put up for sale as the Financial Services Commission (FSC) designated the insurer as a distressed financial institution in April 2022. The deal is led by state-run Korea Deposit Insurance Corp., or KDIC.

The insurer’s K-ICS, or Korean Insurance Capital Standard for capital adequacy, was 52.1% as of the end of the first quarter. The percentage is far below the financial authorities’ recommendation of 150%.

KDIC is considering various plans after the bid failed, such as holding another bid for the insurer or liquidating the insurance company’s assets.

Write to Jong-Kwan Park at pjk@hankyung.com
 

 
Jihyun Kim edited this article.