Mirae Poised to Become Korea's No.1 Broker With Daewoo Deal

Updated on
  • Mirae Asset named preferred bidder for Daewoo Securities stake
  • KDB expects to sign contract with preferred bidder in January

Mirae Asset Financial Group was named the preferred bidder for a stake in Daewoo Securities Co., paving the way for a deal that would create the country’s biggest brokerage by assets.

Korea Development Bank chose Mirae Asset Securities Co. and Mirae Asset Global Investments Co. as the favored purchasers of a 43 percent stake in Daewoo Securities and 100 percent of a small asset management firm, the state-owned bank said in an e-mailed statement on Thursday. The statement didn’t put a value on the bid, though Korea Economic Daily reported on Tuesday that Mirae offered 2.4 trillion won ($2.05 billion).

“We will combine the strong points of Mirae Asset and Daewoo Securities to develop into a global investment bank that represents Asia,” Park Hyeon Joo, chairman and founder of Mirae Asset, said in a statement from Mirae Asset Securities Co.

Recouping Cash

KDB is offloading the stakes as part of government efforts to recoup public funds, which were used to purchase Daewoo Securities after the 1997-1998 Asian financial crisis triggered the collapse of Daewoo Group. KDB plans to sign a contract with the preferred bidder in January, after which Mirae Asset would carry out due diligence, according to the KDB statement.

The combined assets of Mirae Asset Securities and Daewoo are about 61.9 trillion won, exceeding the 41.7 trillion won of assets held by the country’s biggest brokerage, NH Investment & Securities Co., according to data from the Korea Financial Investment Association.

The 43 percent stake in Daewoo Securities is worth 1.43 trillion won, based on the brokerage’s closing share price of 10,200 won on Thursday. KDB Asset Management Co., the asset management firm, had a book value of 65 billion won as of Sept. 30.

Mirae Asset Securities sold 956 billion won of new shares last month to finance potential acquisitions and other new business, according to a regulatory filing.

KB Financial Group Inc., Korea Investment & Securities Co. and Daewoo Securities’ employee stock ownership association also submitted final bids for Daewoo Securities and KDB Asset Management.