Samsung Fire, Samsung Life Pursue Up to $5.8 Billion of UK, US Insurance Deals

Samsung insurers ready record M&A push with Samsung Electronics dividend windfall

Samsung Fire seeks full control of UK insurer Canopius after building a 40% stake; contract could be signed in September

Samsung Life seeks to become top shareholder in US retirement-plan company Principal Financial Group with a $3.6 billion to $4.4 billion investment

Samsung Fire & Marine Insurance Co. and Samsung Life Insurance Co. are pursuing acquisitions in the UK and the US worth as much as 8 trillion won ($5.8 billion). If completed, the transactions would set a new record for the largest cross-border deals by South Korean financial companies. The moves underscore a more aggressive overseas acquisition push by Samsung’s financial affiliates, backed by hefty dividends from Samsung Electronics during the semiconductor upcycle.

Samsung Fire is negotiating with existing major shareholders, including a consortium led by US private equity firm Centerbridge Partners, to acquire nearly 100% of Canopius, a major player in global specialty insurance, according to people in the insurance industry on Sept. 2. The companies could sign a stock purchase agreement as early as September. Samsung Fire invested 1.2 trillion won ($870 million) across three rounds in 2019, 2020 and 2025 to secure a 40% stake in Canopius and a board seat. Acquiring the remaining stake of almost 60% would cost about 2.8 trillion won to 3 trillion won ($2 billion to $2.2 billion), including a control premium. Canopius ranks fifth globally in specialty insurance, covering risks such as terrorism, kidnapping and fine art loss.

Samsung Life is pursuing the purchase of a 15% stake in Principal Financial Group, or PFG, a US financial company specializing in retirement plans. It is in private talks with an existing shareholder. The insurer recently sent requests for proposals to major investment banks and accounting firms as it looks to appoint advisers for the deal. A 15% stake would put Samsung Life ahead of Vanguard Group, which holds 12.08%, making it PFG’s largest shareholder. Nasdaq-listed PFG has a market capitalization of about 32 trillion won ($23.2 billion). The stake under discussion is valued at about 5 trillion won to 6 trillion won ($3.6 billion to $4.4 billion), including a premium for becoming the top shareholder.

PFG manages about $781 billion in assets and is based in Iowa. It is one of the top three players in the US 401(k) retirement market.

Samsung intends to use the acquisitions to secure new growth drivers in the US and Europe. The two insurers hold a combined 10% stake in Samsung Electronics — 8.51% for Samsung Life and 1.49% for Samsung Fire — and stand to build a sizable M&A war chest through dividends boosted by the chip boom.

Samsung financial units pursue first overseas M&A as chip-dividend windfall swells into the trillions of won

Samsung Fire, Samsung Life push what could become the largest acquisitions in South Korea’s financial sector

Samsung Life and Samsung Fire, the biggest life and non-life insurers in South Korea, are pursuing their first global M&A transactions as the domestic market nears saturation. The deals could mark a step toward making South Korea’s financial industry, long viewed as domestically focused, more globally competitive.

Samsung Fire targets high-return insurer with ROE in the 20% range

Samsung Life and Samsung Fire are separately pursuing an investment in Principal Financial Group and an acquisition of Canopius, according to investment banking industry sources on Sept. 2. Samsung Life is weighing a 5 trillion won to 6 trillion won ($3.6 billion to $4.4 billion) investment, while Samsung Fire is considering 2 trillion won to 3 trillion won ($1.4 billion to $2.2 billion). Those transactions would rank as the two biggest deals in the history of South Korea’s financial industry. If both are completed, they would surpass DB Insurance Co.’s 2.31 trillion won ($1.7 billion) acquisition of US insurer Fortegra in 2025, currently the largest overseas M&A deal by a South Korean financial company. Samsung Life’s investment in PFG would become the third-largest overseas M&A deal by a South Korean company across all industries, after SK Hynix Inc.’s acquisition of Intel Corp.’s NAND flash business for about 10.3 trillion won ($7.5 billion) and Samsung Electronics Co.’s purchase of Harman for about 9.3 trillion won ($6.7 billion).

Canopius, which Samsung Fire is seeking to buy outright, is the fifth-largest company in the Lloyd’s specialty insurance market. Lloyd’s is an insurance marketplace made up of individual underwriters and insurance companies. Members sell coverage in 80 countries for risks including terrorism, kidnapping, art, war, bodily injury and live events. Samsung Fire is the second-largest shareholder in Fortuna Topco, which owns 100% of Canopius, with a 40% stake. Its aim is to buy the remaining shares from the Centerbridge-led consortium and turn the company into a wholly owned subsidiary.

Canopius posts return on equity in the 20% range. Samsung Fire booked 168.5 billion won ($122 million) in equity-method profit from its Canopius stake in the first half alone. That was equal to 12.3% of Samsung Fire’s total net income of 1.3723 trillion won ($995 million). Raising its stake above 90% would more than double that equity-method profit. The deal would also strengthen Samsung Fire’s base for global expansion. One industry official said Samsung Fire could use Canopius’ network in the UK, the US, the Netherlands and Singapore to find new growth in higher-value specialty insurance and reinsurance.

Samsung Life seeks top shareholder position in US financial group

Samsung Life is pursuing the acquisition of about 15% of PFG. The Iowa-based company is a global insurance and asset-management group. It is one of the top three providers in the US 401(k) defined-contribution retirement market and has a strong presence among small and midsize businesses. Its assets under management total $781 billion, larger than Mirae Asset Group’s 784 trillion won.

Samsung Life is understood to value PFG’s capabilities in retirement-plan management and alternative investments such as real estate and infrastructure. It expects synergies from bringing high-quality alternative assets held by PFG, including North American commercial real estate and infrastructure, to South Korea. The transaction would also support earnings. If Samsung Life classifies PFG as an affiliate and applies the equity method, PFG’s results would be reflected in Samsung Life’s consolidated financial statements in proportion to its stake. The company could also pursue strategic cooperation, including joint ventures.

Samsung Life and Samsung Fire have typically been viewed as defensive companies focused on risk management. They have more often pursued partnerships through minority investments than full-scale acquisitions. Industry officials have linked the change in approach to Samsung Electronics Chairman Jay Y. Lee. He recently urged major Samsung affiliates to actively pursue global M&A, according to people familiar with the matter.

The strategy has also surfaced in Samsung Financial Group investor relations events. Lee Wan-sam, chief financial officer and executive vice president of Samsung Life, said on the company’s second-quarter earnings conference call that it is actively exploring M&A opportunities not only in Asia but also in advanced markets such as the US. The company has set up a task force led by an executive vice president to review several global M&A opportunities beyond PFG. Koo Young-min, CFO and head of management support at Samsung Fire, said the company plans to expand global operations and diversify its earnings structure.

Ahn Dae-gyu and Seo Hyung-kyo, Hankyung reporters powerzanic@hankyung.com