KB Financial Group is buying 22.6 percent of Hyundai Securities for 1.25 trillion won ($1.09 billion), nearly four times the stake’s current market value.

In a regulatory filing in Seoul on late Tuesday afternoon, KB said it will buy a 22.56 percent stake, or some 53 million shares, in Hyundai Group’s securities arm from Hyundai Merchant Marine and other shareholders. The stock transfer is due to take place May 31.


KB is to start due diligence on the brokerage, which ranks fourth in the industry with 3.2 trillion won in assets, before finalizing the price and other contract terms.  

“We had a very thorough due diligence (on Hyundai Securities) and have reasons to believe (1.25 trillion won) is an appropriate price,” KB Financial Group chairman Yoon Jong-kyoo told a local media outlet Tuesday, apparently mindful of the deal’s hefty premium.

KB Financial has been trying to diversify its business portfolio through mergers and acquisitions, as margins fall in its mainstay business of retail banking. Last year, it lost out to Mirae Asset Financial in the race to take over the industry’s second-ranked firm, KDB Daewoo Securities.

KB owns its own brokerage, but it has only a miniscule presence in the industry.

By Lee Sun-young (milaya@heraldcorp.com)