SEOUL (Thomson Financial) - The UK's HSBC Holdings is negotiating the acquisition of 49 percent of Hana Life Insurance from Hana Financial Group Inc in a bid to gain a foothold in South Korea's insurance market, the Chosun Ilbo reported.
The newspaper said HSBC has completed due diligence and plans to begin price negotiations soon. It did not identify its sources.
HSBC appears to want to tap aggressively the bancassurance market here once it succeeds in expanding its banking network.
Hana Financial wants to secure enough resources for its own expansion from the sale of a stake in its wholly-owned insurance unit, the newspaper said.
Hana Financial said it has no information about such a deal and HSBC declined to comment.
Earlier this month HSBC announced that it has agreed to buy a majority stake in Korea Exchange Bank (KEB) from US private equity fund Lone Star for about 6.3 billion US dollars. But there may be obstacles to the sale because the South Korean regulator has made it clear that it will not approve the sale until legal cases relating to Lone Star's purchase of KEB in 2003 are settled.
Hana Bank, the key unit of Hana Financial, and German insurance giant Allianz launched the Hana Life joint venture in 2003 but Allianz sold its holding to Hana Financial in May this year.
At 10.09 am (0109 GMT), Hana Financial stock was down 50 won or 0.1 percent at 43,000 won. The KOSPI index was up 16.39 points or 0.9 percent at 1,864.41.
(1 US dollar = 929.20 won )
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