Daol Inve Acquisition Battle, 'Woori Financial Group vs. Shin Young Securities' Expected to Compete

Woori Financial, Rapid Shift from Priority 'Securities Firms' to VC
Shinyoung Securities Struggles to Find Alternative Investment Vehicle
Sale Advisor Samil PwC Sets Sale Price Around 200 Billion KRW

[Asia Economy Reporter Kwangho Lee] Daol Investment & Securities is pushing for the sale of its venture capital (VC) subsidiary Daol Investment (formerly KTB Network). This move is interpreted as an effort by the Daol Financial Group to overcome liquidity challenges. The deal is expected to be finalized as early as the beginning of next year.

According to the investment banking (IB) industry on the 9th, Daol Investment & Securities is currently in contact with potential buyers for the sale of Daol Investment. At present, Woori Financial Group and ShinYoung Securities are considered the leading candidates. Although the Eugene Group, which established ties last year by selling Daol Savings Bank (formerly Eugene Savings Bank) to Daol Group for 158 billion KRW, has been mentioned, it is currently focused on acquiring management rights of Mesh Korea, the operator of the delivery platform Burung. Therefore, the industry expects the sale to be a two-way competition between Woori Financial Group and ShinYoung Securities.

Unlike major financial companies such as Shinhan Financial Group (Shinhan Venture Investment), KB Financial Group (KB Investment), and Hana Financial Group (Hana Ventures), Woori Financial Group currently does not have an affiliated VC. As a result, it has been steadily reviewing VC sale opportunities. Similarly, ShinYoung Securities lacks an alternative investment vehicle, unlike Mirae Asset Securities (Mirae Asset Venture Investment), Kiwoom Securities (Kiwoom Investment), Korea Financial Group (Korea Investment Partners), and Yuanta Securities (Yuanta Investment). While several small to mid-sized VC sales have occurred, it is rare for a large firm like Daol Investment to be on the market.

The sale target is 52% of Daol Investment shares held by Daol Investment & Securities. Daol Investment & Securities is reportedly seeking a sale price exceeding 200 billion KRW. PwC Samil is in charge of managing the sale. Daol Group is also pursuing the sale of its stake in its Thailand local subsidiary, Daol Thailand. Similarly, the decision to sell Daol Investment was made to secure group liquidity. Potential buyers such as Woori Financial Group and ShinYoung Securities have already been contacted. In particular, Woori Financial Group is considered the most likely buyer.

An IB industry insider said, “There is a high possibility that Woori Financial Group will acquire it,” adding, “They have been steadily reviewing VC sale opportunities, including Posco Technology Investment.” He further noted, “Daol Investment holds symbolic value as a first-generation domestic VC and is a highly capable house,” adding, “They can instantly secure quality personnel and a variety of funds.”

Although some view the 200 billion KRW sale price as somewhat expensive, more opinions consider it appropriate. Previously, Neoplux (now Shinhan Venture Investment), which was acquired by Shinhan Financial Group, was traded at around 73 billion KRW. Considering that Daol Investment surpasses Shinhan Venture Investment in both assets under management (AUM) and investment personnel size, the deal is expected to close at around 200 billion KRW.

Woori Financial Group’s priority was acquiring a securities firm. It planned to expand non-bank sector revenue by 2023 through acquisitions of securities and insurance companies. Internally, it has reviewed several securities firm sale opportunities, including SK Securities. However, recently, the stance has shifted. Given the availability of a good deal, there is growing support for acquiring the VC first.

The VC industry expects that after acquiring Daol Investment, Woori Financial Group will begin personnel adjustments. Currently, Daol Investment has a relatively high proportion of senior personnel compared to other VCs. However, whether personnel from Woori Financial Group will move immediately remains to be seen.

Daol Group originated from KTB Group, which started with Korea Technology Development funded by the government in 1981, and changed its name earlier this year after acquiring KTB Group. It currently oversees Daol Investment & Securities, Daol Investment, Daol Savings Bank, and Daol Asset Management. Daol Investment, which celebrated its 40th anniversary this year, is a large VC. Many key figures in the industry are part of the ‘KTB faction,’ and the influence of KTB alumni remains significant.

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