Korea Deposit Insurance signs share purchase agreement with OK Next for Yebyeol Insurance sale

Korea Deposit Insurance Corp. said Wednesday it had signed a share purchase agreement with OK Next, an affiliate of OK Financial Group, for the public sale of Yebyeol Non-Life Insurance.

The signing came roughly three months after OK Next was named the preferred bidder in July.

OK Next will now work through the regulatory steps required for the acquisition, including obtaining Financial Services Commission approval for a change of major shareholder. Once all such procedures are complete, Korea Deposit Insurance will provide financial support and transfer the shares to OK Next to finalize the sale.

"We will do our best to bring the process to a swift conclusion in order to protect policyholders and normalize Yebyeol Non-Life Insurance," a Korea Deposit Insurance official said.

Yebyeol Non-Life Insurance is a bridge insurer that Korea Deposit Insurance established to handle the insolvency of MG Non-Life Insurance. In the initial bidding round in April, only Korea Investment Holdings submitted a bid, leaving the process void. In the re-announced tender, four firms — OK Financial Group, Korea Investment Holdings, Heungkuk Fire & Marine Insurance and JC Flowers — submitted final acquisition proposals.

Korea Deposit Insurance had attempted multiple public sales since MG Non-Life Insurance was designated an insolvent financial institution in 2022, but each effort fell through. A deal appeared close in 2024 when a private contract was reached with Meritz Fire & Marine Insurance, but the MG Non-Life Insurance union mounted strong opposition over employment succession, and the sale ultimately collapsed.

Attention now turns to whether OK Next can clear the regulatory hurdle of major shareholder approval. Even after the acquisition, challenges will remain, including capital reinforcement, improvement of the solvency ratio and restoration of the business base.