Kim Yong-beom, Meritz Vice Chairman, "Complete Integration of Fire and Securities, Maximizing Shareholder Returns" (Comprehensive)

[Asia Economy Reporter Changhwan Lee] Meritz Financial Group will fully incorporate Meritz Fire & Marine Insurance and Meritz Securities as wholly owned subsidiaries. Kim Yong-beom, Vice Chairman of Meritz Financial Group, stated that the company plans to maximize shareholder returns through the incorporation of affiliates.

Meritz Financial Group announced on the 21st that it will conduct a comprehensive stock exchange to fully incorporate Meritz Fire & Marine Insurance and Meritz Securities as wholly owned subsidiaries. Accordingly, Meritz Fire & Marine Insurance and Meritz Securities are expected to be delisted early next year.

The exchange ratio is 1.2657378 shares of the holding company stock per 1 share of Meritz Fire & Marine Insurance stock, and 0.1607327 shares of the holding company stock per 1 share of Meritz Securities stock. Meritz Financial Group plans to issue new shares to deliver the exchanged stocks.

Currently, Meritz Financial Group holds 59.5% of Meritz Fire & Marine Insurance shares and 53.4% of Meritz Securities shares. Upon completion of the comprehensive exchange, Meritz Fire & Marine Insurance and Meritz Securities will each be incorporated as 100% subsidiaries of Meritz Financial Group.

Vice Chairman Kim Yong-beom said during a conference call that "due to the rapid expansion of volatility in the financial market and increased uncertainty in future investments, we decided to actively respond to changes in the business environment and generate stable profits."

Kim added, "From the perspective of capital reallocation, the incorporation of Fire & Marine Insurance and Securities is necessary. For example, when trying to invest in opportunities in Securities using profits from Fire & Marine Insurance, currently, since they are separate companies, it takes at least six months to a year to receive dividends after waiting for the shareholders' meeting and then increase capital. This inefficiency will disappear through the merger."

He stated, "From the 2023 fiscal year, the integrated Meritz Financial Group plans to return 50% of consolidated net income to shareholders as a principle, including dividends and treasury stock repurchases and cancellations."

This level exceeds the average shareholder return rate of Meritz Financial Group, Meritz Fire & Marine Insurance, and Meritz Securities over the past three years, and the company plans to maintain this active shareholder return policy for more than three years.

All treasury shares held by Meritz Fire & Marine Insurance and Meritz Securities will be canceled.

After the issuance of new shares and the comprehensive exchange, the holding ratio of Chairman Jo Jung-ho in Meritz Financial Group is expected to decrease from the current 75.8% to about 47%.

Vice Chairman Kim said, "This comprehensive stock exchange has nothing to do with the major shareholder's equity succession. The major shareholder has no plans for equity succession, and there is no conflict of interest between the major shareholder and general shareholders regarding the stock price."

This content was produced with the assistance of AI translation services.