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Samsung Life Insurance to buy stake in Samsung Card

All News 17:41 January 28, 2016

SEOUL, Jan. 28 (Yonhap) -- Samsung Life Insurance Co., South Korea's No. 1 life insurer, said Thursday it will purchase Samsung Electronics Co.'s entire stake in its affiliate Samsung Card as part of the conglomerate's efforts to streamline ownership.

In a regulatory filing, the insurer announced its decision to purchase the 37.45-percent stake the tech giant has in the credit card firm for 1.54 trillion won (US$1.3 billion) to be its largest shareholder.

Currently, Samsung Life Insurance owns 34.41 percent of shares in Samsung Card.

"The stake purchase is designed to boost synergies between insurance and card businesses," Samsung Life Insurance said.

Industry watchers say the move would be the initial step for the life insurer to turn itself into a financial holding company. There has long been speculation that Samsung Group would consolidate control of its financial arms under its life insurer.

Samsung has been reshuffling its business portfolio to speed up the group's leadership change from de facto head Lee Kun-hee to his son, Jay-yong, in a way to tighten the owner family's grip on the conglomerate.

Upon the news, shares of Samsung Life Insurance spiked 11.51 percent to finish at 109,500 won, and Samsung Card surged 10.41 percent to 35,000 won.

Meanwhile, Samsung Life Insurance said that its net income stood at 1.23 trillion won in 2015, down 8.4 percent from the previous year.

The insurer also said it will buy back 3 million shares worth 294.6 billion won, or 1.5 percent of its outstanding shares.

graceoh@yna.co.kr
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