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* Several KB directors saw $2.1 bln price as too
* Few willing buyers for ING's larger Japan and South Korea
* EU agreement has eased pressure on ING to divest quickly
By Joyce Lee
SEOUL, Dec 18 KB Financial Group Inc
decided against buying ING Groep NV's South Korean
insurance unit after mulling over the deal for months, dealing a
setback to the Dutch group's Asia divestment plans.
The board of KB rejected at a meeting on Tuesday what would
have been a roughly $2.1 billion acquisition.
"KB Financial's board of directors decided not to pursue the
acquisition of ING's South Korean insurance unit as [the board]
decided it is more important than ever to maintain a high
capital adequacy level... as conditions for the financial sector
continue to deteriorate due to next year's unclear economic
outlook," the South Korean company said in a statement.
KB, considered a frontrunner to buy the ING unit, had
already cut the negotiated price for the unit to around $2.05
billion, sources previously told Reuters.
But KB's board postponed a final decision on the deal
earlier this month when several independent board members
maintained the price was still too high.
In Tuesday's voting on the deal, five directors gave the
go-ahead but five rejected it and two abstained, a source with
direct knowledge of the deal told Reuters.
KB and an ING spokeswoman declined to comment.
The sale of the South Korean unit is part of ING's wider
Asia divestment programme to repay its 10 billion euro state
bailout received during the global financial crisis.
ING has announced two deals worth $3.87 billion -- to sell
its Hong Kong and Southeast Asian operations -- since launching
the auction nine months ago. It has, however, struggled to find
buyers for the much larger Japan and South Korea units.
But the pressure on the Dutch group to quickly divest the
remainder of its Asia business has eased after it last month won
more time from European Union regulators to repay the state
(Editing by Muralikumar Anantharaman)