US private equity firm Kohlberg Kravis Roberts is reportedly considering making its first ever investment in Asia.
The firm is aiming to acquire a 17.6 percent stake in South Korea’s largest assurer Samsung Life Insurance for approximately Won800 billion ($796 million; €632 million), according to a report in The Korea Times.
The creditors were in negotiations with two other US private equity funds, Warburg Pincus and Newbridge Capital, to sell their stake in Samsung Life earlier this year. Talks reportedly broke down on sale terms, in particular, management rights.
Although KKR has invested in countries across the globe in its 29-year history, the firm has yet to complete a deal in Asia. KKR declined to comment this morning.
The firm’s desire to acquire a stake in Samsung reflects a growing movement by major, global private equity houses towards the region. Earlier this week, The Blackstone Group announced plans to commit $1 billion to India and will open an office in Mumbai, headed up by Akhil Gupta.
Groups such as Ripplewood Holdings, The Carlyle Group and CVC Asia Pacific are already established across the region and KKR will be hoping to emulate the well documented success of LBOs like Ripplewood’s turnaround of Japan’s Shinsei Bank – a deal that looks set to turn a roughly $1 billion equity investment into $7 billion.
However, the tax-free profits that Ripplewood have garnered from the deal have led the Japanese government to tighten tax regulations in relation to foreign investment firms, against a backdrop of negative sentiment towards foreign investors.
Similarly in South Korea, the government has been implementing measures to encourage domestic private equity investors while scrutinising the activities of foreign firms like Newbridge Capital and Warburg Pincus, whose role in the disposal of a stake in LG Card Co is under investigation.