Woori Financial Group submitted an application for approval to acquire TONGYANG Life Insurance and ABL Life Insurance to financial authorities. This comes about five months after the share purchase agreement (SPA) was signed last August.
According to financial authorities on the 16th, Woori Financial submitted an application to the Financial Services Commission the previous day to include TONGYANG Life Insurance and ABL Life as subsidiaries. Earlier, Woori Financial signed a contract on Aug. 28 last year to acquire 75.34% of TONGYANG Life Insurance for 1.28 trillion won and 100% of ABL Life for 265.4 billion won. Initially, they planned to complete the acquisition by the end of the year after the financial authorities' approval process, but the FSS announced an additional inspection plan related to the improper loans involving former Woori Financial Chairman Son Tae-seung, causing the acquisition schedule to be delayed.
With Woori Financial submitting the application, the FSS is expected to commence the formal review process. The decision on the acquisition approval will be finalized in a plenary session of the Financial Services Commission after the FSS review. An FSS official noted, "The Financial Services Commission received the request for approval for Woori Financial's inclusion of TONGYANG Life Insurance and ABL Life as subsidiaries and has begun the review process," adding, "According to relevant laws, the review period is 60 days, but the material submission period may extend the timeline."
He continued, "There are several approval requirements; the basic items involve requesting materials to start the review, and the soundness requirements will naturally consider how Woori Financial's inspection results are proceeding. I believe the soundness aspect related to the inspection results will be the most critical issue." According to the company inclusion approval requirements stipulated in the Financial Holding Company Act, the business plan of the company included as a subsidiary must be reasonable and sound, and the financial status and management condition of the financial holding company and subsidiaries must also be sound.
The FSS planned to announce the interim results of the inspection last month after conducting regular inspections and management evaluations of Woori Financial and Woori Bank for about two months since October last year. However, due to the aftereffects of the state of emergency, the announcement of the results was postponed to early February. FSS Chairman Lee Bok-hyun commented on the delay in announcing the inspection results, saying, "It is not a matter of treating illegal acts lightly but aims to inform the market and the public with a 'spicy taste.'"
The management evaluation grade could affect the approval of Woori Financial's acquisition of TONGYANG Life Insurance and ABL Life by financial authorities. According to the regulations for supervising financial holding companies, Woori Financial must receive a comprehensive evaluation grade of at least Level 2 to include TONGYANG Life Insurance and ABL Life as subsidiaries. Currently, Woori Financial maintains a grade of 2 or above.