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S.Korea Lotte to buy majority of non-life insurer

Thu Dec 6, 2007 8:33pm EST

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SEOUL, Dec 7 (Reuters) - A consortium led by South Korea's Lotte Hotel has signed an agreement to buy a majority of Daehan Fire & Marine Insurance (000400.KS), the insurance firm said on Friday, in a deal reportedly worth about $400 million.

Under the deal, the consortium will buy a 57 percent stake in the non-life insurer from unlisted Daehan Cement Co Ltd and two unidentified top shareholders, which local newspapers said was valued at 370 billion won ($401 million).

Closing the transaction will come after a three-week due diligence on the non-life insurer, Daehan Fire said in a filing to the stock exchange, without giving the value.

The transaction will enable Lotte, which specialises in retail and petrochemical businesses including Lotte Shopping (023530.KS), to expand its financial services and follows its purchase of a credit card company several years ago.

A Lotte Group spokesman said it has not decided yet on who would participate in the consortium for the acquisition, adding the price tag would be fixed after studying Daehan's books.

For Daehan's parent Daeju Group, the sale will create cash to strengthen its shipbuilding business, a Daehan Fire spokesman said.

Shares in Daehan Fire soared by its daily ceiling of 15 percent to 20,100 won by 0054 GMT, outperforming the wider market's 0.23 percent rise on expectation the purchase will create synergies for the insurer's auto and casualty cover businesses. ($1=922.7 Won) (Reporting by Kim Yeon-hee, editing by Jonathan Thatcher)



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