Go to contents

Shinhan Selected Expected Buyer of CH Bank

Posted December. 26, 2002 22:32,   


Shinhan Financial Holding Company is selected as the privileged party in negotiations for sale of CH Bank.

As the merger between Shinhan and CH bank is likely to be consummated, the financial industry will undergo a huge transformation again. So far, the industry has experienced gigantic changes with the merger of Koomin Bank and Jootak Bank, and that of Hana and Seoul Bank.

In the meanwhile, the labor union of CH Bank plans to wage a fierce opposition to the expected merger. The union has strongly opposed the government`s decision to sell its shares at the earliest stage possible. Therefore, a controversy is expected to rise in the process of executing the decision.

Yesterday, at the Korea Deposit Insurance Corporation, the government held the 4th meeting of the special subcommittee of the Public Fund Oversight Committee, a subcommittee organized solely for selling CH Bank. In the meeting, Shinhan was selected the privileged negotiation party. The subcommittee intends to announce its decision at the full session of the Committee scheduled for early next week.

The subcommittee reportedly demanded that Shinhan should raise the acquisition price and come up with measures to protect the price of CH Bank`s stock from falling down. The subcommittee also recommended, in consideration of the long history and brand value of CH Bank, that Shinhan incorporate the name "CH (or Chohung)" into that of the expected new company.

Until recently, a couple of companies had fiercely competed with each other to get the privileged status. Shinhan reportedly proposed that it would buy all the shares retained by the government (80.04%). It also offered to pay cash for 40% of them, and pay in stock for the remaining shares. Shinhan intends to operate CH Bank as a separate affiliate for the 2 years to come, and to gradually finish up the incorporating process thereafter.

Secretary General Yoo Jae-han of the committee explained, "Reviewing all the terms and conditions offered by prospective buyers, our committee members unanimously agreed to select Shinhan. The final decision will be made at the full session of the Public Fund Oversight Committee. Then, Korea Deposit Insurance Corporation has to approve of the deal."

At the news, the labor union of CH Bank promised its severe opposition and stated, "Our union members will do whatever we can to shoot down the announced plan of the government."

Shinhan Financial Holding Company is a giant financial group having more than 10 financial companies as its affiliates including Shinhan Bank, Good Morning Shinhan Securities, Shinhan Card and Shinhan Capital.

Kwang-Hyun Kim Chi-Young Shin kkh@donga.com higgledy@donga.com