Hanwha Life Insurance acquires Acuon Capital for W440b, enters credit finance

Hanwha Life Insurance is acquiring a capital finance company and a savings bank in a single deal, marking its entry into the credit finance business. The move, combined with a capital injection into its brokerage affiliate, signals the insurer's push to build a full-service financial group spanning insurance, securities, asset management and credit finance.

Hanwha Life Insurance said Wednesday its board of directors approved the acquisition of a controlling stake in Acuon Capital from global private equity firm EQT. The deal will be structured as a co-investment with Centroid PE.

According to a regulatory disclosure filed that day, Hanwha Life Insurance and a private equity fund managed by Centroid Investment Partners will purchase a combined 34,624,153 common shares of Acuon Capital from seller Agora, L.P. Hanwha Life Insurance will acquire 17,511,066 shares for 440 billion won ($324 million) in cash, with the private equity fund taking the remaining 17,113,087 shares. After the transaction, Hanwha Life Insurance will hold a 50.54 percent stake. The acquisition price represents 2.65 percent of the insurer's equity capital of 16.62 trillion won, based on last year's consolidated figures. The company said the purpose of the acquisition is to diversify its business portfolio by entering the specialized credit finance sector.

Hanwha Life Insurance and the private equity fund also entered into a shareholders' agreement. Under the agreement, the fund will hold a put option allowing it to demand that Hanwha Life Insurance buy its Acuon Capital shares if certain conditions are met. In return, Hanwha Life Insurance secured a call option and a right of first refusal over the fund's stake. The fund also holds drag-along rights, enabling it to compel Hanwha Life Insurance to sell its shares alongside the fund's if the agreed conditions are triggered. The fund additionally holds tag-along rights, allowing it to participate in any sale of Hanwha Life Insurance's stake to a third party.

Acuon Capital owns 100 percent of Acuon Savings Bank. Once the deal closes, Acuon Capital will become a subsidiary of Hanwha Life Insurance, and Acuon Savings Bank will be incorporated as an indirect subsidiary.

Founded in 2006, Acuon Capital is a mid-sized capital finance company with total assets of 4.6 trillion won as of the first half of this year. It operates independently of any financial holding group or large conglomerate, specializing in corporate finance, investment finance and asset-backed finance. On a consolidated basis including Acuon Savings Bank, Acuon Capital posted sales of 894.5 billion won and a net profit for the period of 65.6 billion won last year. Sales rose 15.5 percent from the previous year's 774.2 billion won, though net profit fell 18.2 percent from 80.2 billion won. The company recorded a net loss of 31.8 billion won in 2023. Total consolidated assets stood at 9.04 trillion won at the end of last year.

Hanwha Life Insurance said the acquisition will help it secure new revenue streams distinct from its insurance business and strengthen its corporate and investment finance capabilities. The insurer plans to link Acuon Capital's corporate and asset-backed finance expertise with existing group operations and expand the asset-backed finance business through collaboration with non-financial affiliates. For Acuon Capital, joining the Hanwha Life Insurance group is expected to raise its credit standing, lower funding costs and improve earnings.

The deal also significantly expands Hanwha Life Insurance's savings bank footprint. Founded in 1972, Acuon Savings Bank ranks among the top five savings banks in the country, with total assets of 5.1 trillion won. It operates three financial centers in Seoul and Busan, with about 380 employees as of the end of June. The bank focuses primarily on retail lending and also handles loans to small and medium-sized enterprises, self-employed borrowers and mortgage borrowers. It has built a reputation for competitive digital, non-face-to-face banking through a proprietary IT platform.

Hanwha Life Insurance plans to combine the strengths of Acuon Savings Bank with those of its existing subsidiary Hanwha Savings Bank, creating a savings bank group with total assets of around 6.5 trillion won and targeting a rise to fourth place in the industry. The combined network will also expand from its current base in Incheon and Gyeonggi Province to cover Seoul, Busan, Ulsan and South Gyeongsang Province, spanning both the greater Seoul metropolitan area and the Yeongnam region.

The board also approved participation in a rights offering by Hanwha Investment & Securities at the same meeting. Hanwha Life Insurance and Hanwha Asset Management, a wholly owned subsidiary of Hanwha Life Insurance, will each contribute 250 billion won, for a combined total of 500 billion won. The capital raise is intended to support Hanwha Investment & Securities' designation as a comprehensive financial investment business operator, strengthening its core competitiveness.

Hanwha Life Insurance said that once Hanwha Investment & Securities receives that designation, it expects not only higher investment returns from its direct and indirect securities holdings, but also greater diversification of its business and investment portfolio and expanded synergies across the group.

If Hanwha Investment & Securities grows into a comprehensive financial investment operator with enhanced corporate finance capabilities, and that is combined with Acuon Capital's credit finance expertise, the group expects to offer corporate clients integrated solutions spanning both capital markets and lending. The addition of a savings bank with assets in the 5 trillion won range is expected to broaden retail financial touchpoints and create greater opportunities to expand the financial product lineup by linking customer bases across affiliates.

"This investment is an important turning point in our journey from an insurer to a comprehensive financial group," a Hanwha Life Insurance official said. "We will provide customers with a broader range of financial services, backed by the value chain of Hanwha Finance spanning insurance, securities, asset management and credit finance."