* Tong Yang has market capitalisation of about $1.1 bln
* Tong Yang is backed by private equity fund Vogo Capital
SEOUL/HONG KONG, March 6 (Reuters) - The sale of ING Groep's South Korean unit is set to be revived after private equity-backed Tong Yang Life Insurance Co Ltd said it was considering whether to buy the business, which is valued at about $2.1 billion.
Last year, Dutch financial services firm ING failed to strike a deal with KB Financial Group Inc to sell the unit after negotiating for nearly 10 months, during which KB pushed down the price to about $2.1 billion.
ING, which received a 10 billion euros ($13 billion) bailout in 2008, sold its Malaysian, Thailand and Hong Kong units last year for $3.9 billion. The sales were part of a wider asset divestment programme to repay the state bailout. But ING has yet to find buyers for two of its biggest Asian units - South Korea and Japan.
In a regulatory filing on Wednesday, Vogo Capital-owned Tong Yang said it was reviewing whether to buy ING's South Korean insurance unit. Tong Yang did not say how it plans to fund the acquisition if it decides to proceed with a bid, which would be almost double the size of Tong Yang's market value of $1.1 billion.
Tong Yang shares were down 0.9 percent, while the benchmark South Korean index was up 0.3 percent.
In a report late last month, Moody's Investors Service predicted that life insurance premiums in South Korea would grow between 6 percent and 6.5 percent in the next 12 to 18 months.
Last year, Tong Yang itself was in the midst of a takeover process, after South Korea's Vogo Fund put an up to 60.7 percent stake on the block. That process attracted interest from Korea Life Insurance Co Ltd and Prudential Financial Inc but the deal fell apart after the parties failed to reach an agreement over the price, sources said.
When ING launched the Asian insurance sale in March last year, the South Korea operations had attracted interest from Metlife Inc, Prudential Financial and AIA Group Ltd , although that preliminary interest failed to translate into firm bids.
ING officials had previously told South Korean regulators that the company would inform regulators of their future plans for the unit within the first quarter of 2013, a source has said.