Eugene PE, a private equity fund affiliated with Eugene Group, is expected to acquire a 4% stake in Woori Financial Group. By securing the right to recommend outside directors, they can participate in management. In the financial industry, opinions are divided between the analysis of ‘simple investment with growth potential in mind’ and ‘Isn’t it the Eugene Group’s move into the banking industry?’
According to the investment bank (IB) and the financial sector on the 21st, the Public Fund Management Committee under the Financial Services Commission is the acquirer of the remaining shares in Woori Financial Group, including Eugene PE, Dunamu, Woori Employee Stock Ownership Association of Woori Financial Group, KTB Asset Management, and Align Partners. The location is said to be selected. There remains a possibility that ST International (former Samtan) will also be included in the shareholder. It is reported that the Public Fund Management Committee will grant Eugene PE a 4% stake and the right to recommend outside directors, and allocate less than 0.8% to 2.0% shares to the remaining investors. The stake in the sale is up to 10% of the 15.13% owned by the Korea Deposit Insurance Corporation. The Public Fund Management Committee will announce the results on the 22nd.
In the main bid held on the 18th, these candidates and nine companies including Harim Group, Hoban Construction and Korea Investment Holdings participated. When the transaction is completed, Woori Financial, which was launched as Korea’s first financial holding company in 2001, will be privatized for the first time in 20 years. After the financial crisis, the government invested about 13 trillion won in public funds to revive Woori Financial Group.
Beating Harim and Hantu… Eugene PE, Woori Financial Shareholder
Became the fourth largest shareholder after the National Pension Service, employee stock ownership, and IMM… Management Participation In the acquisition of Woori Financial Group, Harim Group, Hoban Construction, and Korea Investment Holdings were initially mentioned as potential candidates for a 4% stake. However, Eugene PE was compressed as the only 4% acquirer with an unexpectedly aggressive bet.
The industry’s analysis is that Woori Financial chose Eugene PE as it was judged that financial investors (FIs) would be more helpful than general corporations or financial institutions in terms of strengthening the competitiveness of the company and stabilizing the governance structure after the complete privatization was completed. .
The industry is analyzing that Eugene PE invested with Woori Financial as a major beneficiary of interest rate hikes and mid- to long-term growth potential in mind. This means that unlike other financial holding companies that have already strengthened their non-banking portfolio, Woori Financial Group has taken over additional non-banking financial affiliates such as securities and insurance, which means that it has room to use it as a growth engine.
Some observers say that Eugene Group will advance into the banking industry in the mid- to long-term with Eugene PE at the forefront. Eugene Group partnered with Eugene PE in 2017 to acquire Eugene Savings Bank (former Daeyoung Savings Bank) and sold it to KTB Investment & Securities this year. Eugene PE is known to have emphasized its strengths as a FI and its experience of participating in banking management in the due diligence process.
If Eugene PE acquires a stake in Woori Financial Group, it will become the fourth major shareholder after the National Pension Service (9.80%), Woori Financial Group (8.38%) and IMM PE (5.57%). However, given that Eugene Asset Management holds a 3% stake in Woori Financial Group, the influence of Eugene Group is expected to grow.
As Eugene PE secured the right to recommend outside directors, it is expected that the outside directors of Woori Financial will again be organized into five members. Currently, the Woori Financial Board of Directors consists of 7 members, including 3 inside directors and 4 outside directors, including Sohn Tae-seung, chairman of Woori Financial Group. Originally, there were six outside directors, but after the recent resignation of Tian Ziping, vice president of Fufudaohe Investment Management Co., Ltd. (recommended by Dongyang Life) and Zhan Wenwei, former vice chairman of Fubon Bank of China (recommended by Fubon Life), the four-member system did not fill new outside directors. have been maintaining
It is also noteworthy that Dunamu, who operates Upbit, joined as a new shareholder before this acquisition. Dunamu has recently expanded its business to the financial sector, including securities. It is a move to strengthen its position as a cryptocurrency exchange by securing shares in major domestic financial holding companies.
Align Partners is a management company established by Changhwan Lee, a former Kohlberg Kravis Roberts (KKR) former CEO. This is the first transaction that CEO Lee made after establishing the company. It is analyzed that KTB Asset Management participated in the acquisition until the end as it judged that Woori Financial had greater growth potential than other financial holding companies. As the employee stock ownership association secured an additional stake, the company’s stake was increased to a level equal to that of the National Pension Service, the largest shareholder. When the transaction is closed, the forecast share will be lowered to 5.13%.
Reporter Chaeyeon Kim why29@hankyung.com
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