China's Fosun Among Late Bidders for Korean Insurer LIG -- Update

By Dow Jones Business News, 
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By Enda Curran and Jeyup S. Kwaak

HONG KONG--Chinese conglomerate Fosun International Ltd. is among late bidders for a US$330 million stake in South Korea's fourth-largest property and casualty insurer, as Fosun Chairman Guo Guangchang seeks to build an insurance company modeled on Warren Buffett's Berkshire Hathaway Inc.

The bid for LIG Insurance Co. is the latest effort by one of China's largest conglomerates to grow a global insurance business. It comes just months after Fosun took an 80% stake in Portugal's largest insurance group.

In January, Hong Kong-listed Fosun paid 1 billion euros (US$1.36 billion) for the stake in the insurance arm of Portuguese state bank Caixa Geral de DepĆ³sitos, beating bids by Apollo Global Management.

A number of South Korean companies are also bidding for a 19.83% stake in LIG. They include Tongyang Life Insurance Co., the nation's eighth-largest life insurer, conglomerate Lotte Group and KB Financial Group, an LIG spokesman said. KB Financial Group is one of the country's biggest financial groups.

The deal is expected to be concluded in coming weeks, the LIG spokesman said.

KB Financial Group, Tongyang, and Lotte Group couldn't be immediately reached for comment.

The LIG stake, valued at around US$330 million, is jointly owned by 17 of LIG's biggest shareholders. It is being offered for sale as part of management's efforts to repay investors who lost money on commercial bonds issued by LIG affiliate LIG E&C, a builder that was put under a court-led debt restructuring in 2011.

Fosun Chief Executive Liang Xunjun told The Wall Street Journal last year that the company admires Mr. Buffett for his skill in finding cheap money and low-cost projects, improving them and then selling them at a premium.

Fosun Group also made headlines late last year when it completed the purchase of the 60-story One Chase Manhattan Plaza in Lower Manhattan late last year.

Not all of Fosun's forays into insurance have succeeded. A consortium it led pulled out of a bid for American International Group Inc.'s Asian insurance arm in 2010 because the parties couldn't agree on a price.

The Shanghai-based group, listed as Fosun International on the Hong Kong stock exchange, is 79%-owned by its four Chinese founders. It started out as a small pharmaceutical business in 1992 and quickly expanded into real estate and other sectors, in part by buying state assets.

Yvonne Lee, Cynthia Koons and Chao Deng contributed to this article.

Write to Enda Curran at enda.curran@wsj.com and Jeyup S. Kwaak at jeyup.kwaak@wsj.com

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  06-05-140630ET
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This article appears in: Commodities

Referenced Stocks: AIG , BRK.A

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