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Samsung Life eyes $4.5 billion in Korea's record IPO
March 31, 2010 / 5:35 AM / in 8 years

Samsung Life eyes $4.5 billion in Korea's record IPO

SEOUL (Reuters) - Samsung Life Insurance Co Ltd, South Korea’s top life insurer, is seeking to raise up to 5.1 trillion won ($4.5 billion) in the country’s biggest IPO and second-largest offering in Asia so far this year.

<p>An employee at Samsung Life walks at the company headquarters in Seoul March 31, 2010. REUTERS/Lee Jae-Won</p>

The IPO comes hard on the heels of second-ranked life insurer Korea Life’s (088350.KS) $1.6 billion IPO earlier this month and mid-range pricing of $11 billion share sale by Japan’s Dai-ichi Mutual Life Insurance -- the world’s biggest IPO in two years -- which is set to debut on Thursday.

Samsung Life, whose top shareholder is Lee Kun-hee, South Korea’s richest man and reinstated chairman of affiliate Samsung Electronics (005930.KS), is offering 44.4 million existing shares at between 90,000 won and 115,000 won each.

Pricing will be decided on April 27 for its May 12 listing.

The indicative range was set below market expectation of between 100,000 and 120,000 won to ensure smooth sale after offering size swelled by around 1 trillion won, a source said.

The shares represent 22 percent of Samsung Life’s total outstanding stock and, at the top of the range, value the insurer at 23 trillion won ($20 billion), ranking it behind only Samsung Electronics, steelmaker POSCO (005490.KS), Hyundai Motor (005380.KS) and Korea Electric Power Corp (015760.KS) among Korea’s listed companies.


Samsung Life is one of the two main pillars that Lee family has a sizable stake to influence the whole Samsung Group affiliates and its crown jewel Samsung Electronics.

Samsung Life’s 7.5 percent stake in Samsung Electronics, which overtook Hewlett-Packard (HPQ.N) last year as the world’s biggest electronics firm by revenue, is currently worth about 9 trillion won and accounts for a big chunk of the insurer’s value.

Samsung Life controls around 27 percent of South Korea’s $65 billion life insurance market and had 131 trillion won in assets at end-December.

The offering is the lynchpin of efforts by its parent Samsung Group to settle long-standing legal wrangle with creditors of its failed auto business, Samsung Motors, as creditors of the car unit have sought to cash in their holding in the insurer taken as collateral a decade ago.

Pricing remains a key, as proceeds from the IPO may not be enough to cover debt and interest owed by Samsung Group to creditors if the offering is priced near or below of the bottom of the range. If so, Samsung companies and Lee Kun-hee may be forced to cough more shares to pay back the debt, weakening Lee’s grip on the sprawling business conglomerate.

Retailer Shinsegae (004170.KS) and food firm CJ CheilJedang (097950.KS) are each selling 5 million shares.

Shares in Samsung Life last traded at 119,500 won in the over-the-counter market for unlisted stocks, down 2 percent this week, according to broker site Presdaq.

Goldman Sachs (GS.N) is the global coordinator of the sale, while Korea Investment & Securities handled domestic offering.

Editing by Ian Geoghegan and Lincoln Feast

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