OK Financial Group was selected as the preferred bidder for Yebyeol Insurance by the Korea Deposit Insurance Corporation on the 10th, marking the group's first M&A success in 10 years since acquiring Korea Citi Capital. The acquisition represents the first case of a savings bank-affiliated financial group acquiring an insurance company in South Korea. Yebyeol Insurance is a bridge insurance company established with 100% investment from KDIC to restructure the insolvent MG Insurance, which was designated as an insolvent financial institution in April 2022. The successful selection came after six previous sale attempts failed, with OK Financial competing against three other final bidders including Heungkuk Fire & Marine, JC Flowers, and Korea Investment & Securities. The deal advances Chairman Choi Yoon's 27-year pursuit of building a comprehensive financial group, overcoming previous regulatory obstacles related to the company's consumer lending origins and Japanese capital background.
KDIC Implements Dual-Track Strategy for Yebyeol Insurance Sale
The Korea Deposit Insurance Corporation pursued a dual-track strategy combining bridge insurance company establishment with continued sale efforts after multiple failed attempts. KDIC attempted to sell MG Insurance six times following its designation as an insolvent financial institution in April 2022, with all attempts ending in failure. Market skepticism grew about the company's viability, and liquidation concerns intensified when Meritz Fire & Marine's preferred bidder status was terminated at the end of 2024.
The Financial Services Commission approved the contract transfer and business suspension of MG Insurance in September last year, transferring all insurance contracts and assets to Yebyeol Insurance. The commission simultaneously confirmed acquisition interest from potential buyers. KDIC conducted a public sale in April this year, but the auction failed when only Korea Investment & Securities submitted a final acquisition proposal. Three entities participated as preliminary buyers at that time: Hana Financial Group, Korea Investment & Securities, and JC Flowers.
KDIC confirmed sale feasibility with potential buyers including the sole bidder, and launched a re-bidding process for Yebyeol Insurance in May, one month later. Four entities submitted final acquisition proposals in the re-bidding: Heungkuk Fire & Marine, OK Financial, JC Flowers, and Korea Investment & Securities.
Chairman Choi Yoon Pursues Comprehensive Financial Group Through Yebyeol Acquisition
Chairman Choi Yoon, a Japanese-Korean businessman who entered the Korean financial market, moved closer to his 27-year goal of building a comprehensive financial group with OK Financial Group's selection as preferred bidder for Yebyeol Insurance. OK Financial started in consumer lending and grew into a non-bank financial group by sequentially acquiring a savings bank and capital company, now facing its first new business entry in 10 years since the capital acquisition.
Chairman Choi disclosed plans to create a comprehensive consumer finance group encompassing savings banks, card companies, securities firms, and asset management companies since the Rush & Cash era. He formally entered the domestic financial market in 2004 by acquiring A&O International, a Japanese consumer lending company established in Korea, and changed the company name to Rush & Cash.
The company accelerated business expansion by entering the savings bank business in 2014 through the acquisition of Yeju and Yenarae Savings Bank, the predecessors of OK Savings Bank, and established a foundation for comprehensive financial group advancement in 2016 by acquiring Korea Citi Group Capital and changing the name to OK Capital. However, the company's history of growth based on consumer lending and Japanese capital repeatedly became obstacles in subsequent financial company acquisition processes.
Chairman Choi challenged major securities company M&As including LIG Investment & Securities (now Cape Investment & Securities) and Leading Investment & Securities, but all attempts ended in failure. In 2017, the company was selected as preferred bidder for eBest Investment & Securities (now LS Securities) but failed to pass the financial authorities' major shareholder qualification review due to its consumer lending-centered management structure.
The company also failed in final acquisitions of Aju Capital and Dongbu Capital before acquiring Korea Citi Group Capital, and negotiations were delayed due to employee opposition even after being selected as preferred bidder for Citi Group Capital. Chairman Choi worked to restructure the consumer lending-centered business structure and shed the Japanese capital image.
In 2019, marking the 20th anniversary, the company changed its name from Afro Service Group to OK Financial Group, expressing "Original Korean" to convey the meaning of a Korean company. The company also completed its exit from the consumer lending business, which was cited as an obstacle in financial company acquisitions, in October 2023, one year and three months earlier than the originally planned timeline.
OK Financial Submits Conservative Bid in Four-Way Competition
OK Financial reportedly gained an advantage in price evaluation by submitting the most conservative support amount among bidders. The structure requires lower government support and higher investment from buyers as bid prices decrease. OK Financial was selected as preferred bidder by outcompeting Heungkuk Fire & Marine, JC Flowers, and Korea Investment & Securities.
A financial industry official stated that while employment succession issues appear likely to face less resistance compared to other acquisition competitors, whether the company can ultimately pass the financial authorities' approval threshold remains key, adding that given past failed experiences, OK Financial will approach this with the mindset that it is their last opportunity.
FAQ
What did OK Financial Group acquire on the 10th?
OK Financial Group was selected as the preferred bidder for Yebyeol Insurance by the Korea Deposit Insurance Corporation on the 10th. Yebyeol Insurance is a bridge insurance company established with 100% investment from KDIC to restructure MG Insurance, which was designated as an insolvent financial institution in April 2022.
Why did previous sale attempts for MG Insurance fail?
KDIC attempted to sell MG Insurance six times after its designation as an insolvent financial institution in April 2022, with all attempts failing. The most recent failure occurred when Meritz Fire & Marine's preferred bidder status was terminated at the end of 2024, leading to intensified liquidation concerns before the successful dual-track strategy implementation.
How many bidders competed in the final Yebyeol Insurance acquisition?
Four entities submitted final acquisition proposals in the re-bidding process: Heungkuk Fire & Marine, OK Financial, JC Flowers, and Korea Investment & Securities. OK Financial was selected as preferred bidder by submitting the most conservative support amount, gaining an advantage in price evaluation.
