Hyundai Securities will be a fully owned affiliate of KB Financial Group when the company is delisted from the Korea Exchange in the fall of this year. The financial group said its board held a meeting on Aug. 2 regarding its 100 percent takeover of all shares of Hyundai Securities. The group will issue new shares in exchange for its purchase of all the existing shares, the group said.
The financial group already holds a 29.62 percent stake in the securities firm. The group will buy the remaining 70.38 percent stake in the upcoming exchange of shares from the shareholders. The share exchange rate would be 1:0.19 with the share price of KB Financial Holdings pegged at 35,474 won per share versus 6,766 won per share for Hyundai Securities.
Hyundai Securities will hold a shareholder’s meeting for approval of the deal. When completed, the securities firm will be delisted from the Korea Exchange from Nov. 22.
The shareholders of the securities firm who are opposed to the deal can ask the securities firm to buy their shares. KB Financial can turn down the deal if the value of the shares requested to be bought amount to 770 billion won in total.
KB Financial plans to push forward with its plan to have Hyundai Securities and KB Investment Securities merged. KB Financial also will buy 500 billion won worth of its own shares after issuing new shares to boost the price of its shares.
The group finished its acquisition of the securities firm as its 13th affiliate on June 1 after wrapping up payments on May 31. The group said the acquisition will enhance the balance of its business portfolio, as its competence in the non-banking sector has increased following its acquisition last year of former LIG Insurance and now Hyundai Securities.
Its expansion into the securities sector will give it opportunities to provide various services to customers in wealth management and corporate investment banking (CIB). The group said in a statement that its project to increase its clients' wealth will gain momentum as the group now has a large brokerage firm under its wing.
"It is undeniable that there is a limit in increasing wealth through traditional financial products, such as deposit or installment savings," an official at KB Financial Group said. "So far, the group has been nurturing competitiveness in medium-risk-medium-return investment products and the joining of Hyundai Securities will bring about a synergy effect."
According to the statement, the group will integrate its customer channel and capital strength with Hyundai Securities' customer base and business domain. The group cited Bank of America and JP Morgan Chase as model cases of seeking a shift to a business model of affiliating with banks with a solid customer channel.
For that, the KB Financial Group said it will accelerate its efforts to reorganize its workforce because of the acquisition of Hyundai Securities. Also, the group plans to enhance its CIB capability by utilizing Hyundai Securities' knowhow. Adding 2.8 million Hyundai Securities customers, KB Financial Group will have 35 million customers, far surpassing that of its peers.
"As Hyundai Securities became our affiliate, KB Financial Group will put forth every effort in assisting our clients increase their wealth and helping the companies we serve increase their financial soundness. In these endeavors we want to become the blood vessels of the Korean economy," said KB Financial Group Chairman Yoon Jong-kyoo.
In response to the diverse changes taking place in the Financial environment worldwide, KB Financial Group came into being with the establishment of KB Financial Holding Incorporated on Sept. 29, 2008, made possible by the comprehensive transfer of the stocks of major subsidiary.
As of June 2016, the group was Korea’s largest and leading provider of a comprehensive range of financial services, complete with total assets amounting to 462.4 trillion won (Incl. Trusts and Assets Under Management) and with the farthest-ranging customer basis and network of branches in Korea. KB Financial Holding’s subsidiaries include KB Kookmin Bank, KB Insurance, Hyundai Securities, KB Kookmin Card, KB Investment & Securities, KB Life Insurance, KB Asset Management, KB Capital, KB Savings Bank, KB Real Estate Trust, KB Investment, KB Credit Information, and KB Data systems.
