Shinhan Financial decides to pay a reported 693 billion won for 77% of Lotte Insurance

The two prices fit one valuation. Divide Yonhap's 693 billion won ^[1] by the 77.04% stake ^[2] and all of Lotte Insurance comes to about 899.5 billion won ^[12]. Seoul Economic Daily reported the deal at around 900 billion won on a 100% stake basis and said the specific contract amount had not been disclosed ^[5]. A single valuation quoted in two forms would produce the same match, so the agreement checks the arithmetic without confirming a contract price. Yonhap attributed its figure to industry sources ^[1].

At the same implied valuation, the remaining 22.96% would cost about 207 billion won ^[14]. That would take the total to roughly 900 billion won, about 30% above the 693 billion won Yonhap reported ^[13]. Neither report gives Lotte Insurance's earnings or book value, so no multiple can be computed and the 900 billion won cannot yet be tested against what the business earns.

On July 23, at second-quarter earnings, Chief Financial Officer Jang Jung-hoon said the group would pursue mergers and acquisitions "within a scope that does not violate the principles of Value-up 2.0 announced in April." ^[10] The board met 82 days later ^[15].

We think the logic is scale. If Shinhan EZ General's losses come from fixed costs spread over too little premium, a midsize insurer ^[7] adds that premium in one step. The counter-thesis is that the losses come from underwriting or pricing, in which case adding Lotte Insurance enlarges the problem. We would be wrong if the combined non-life business is still losing money after integration, or if Lotte Insurance's own results turn out weaker than a 900 billion won valuation implies.