SEOUL/FRANKFURT Anbang Insurance Group has agreed to buy German insurer Allianz's South Korean businesses for more than $3 million, the Chinese company said on Wednesday, extending a push that has so far seen it spend billions of dollars on overseas assets.
Anbang has been one of the biggest corporate buyers from China in the last few years and this latest deal is its first move since it unexpectedly withdrew from a $14 billion bid for Starwood Hotels & Resorts Worldwide Inc last week.
It will buy Allianz Life Insurance Korea and asset management firm Allianz Global Investors Korea, the Chinese and German companies said in a joint statement.
The purchases expand Anbang's presence in South Korea after it bought a 63 percent stake in Tongyang Life Insurance last year for 1.1 trillion won ($949 million).
Allianz is selling the operations as part of a global overhaul in a tough low-interest rate environment. It has been active in South Korea since 1999 but will have little remaining operations there once the sale is completed.
The South Korean businesses, which have more than 1,000 employees and 1.2 million customers, had premiums of 1.7 billion euros ($1.9 billion) last year and made a 244 million euro operating loss.
Allianz Chief Executive Oliver Baete has said he wants affiliates to achieve return on equity of at least 10 percent and could sell those who fail to make the cut.
"We expect a charge when the deal closes," an Allianz spokesman said on Wednesday, adding that the hit to the profit and loss account could be up to several hundred million euros.
The transaction is subject to local regulatory approvals, which are expected to take up to six months.
Sitting on $253 billion in assets, Anbang has been aggressively expanding overseas, including last year's headline-grabbing $1.95 billion purchase of New York's Waldorf Astoria Hotel and its agreement last month to buy Strategic Hotels & Resorts Inc from Blackstone Group LP for $6.5 billion.
It is also awaiting regulatory approval for its purchase of U.S. insurer Fidelity & Guaranty Life for $1.6 billion.
($1 = 1,155.6000 won)
($1 = 0.8816 euros)
(Editing by Susan Fenton and Jane Merriman)
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