JB Financial Group, one of South Korea's largest financial conglomerates, has successfully acquired Vietnam-based brokerage Morgan Stanley Gateway Securities.
The move is a part of the giant’s mergers and acquisitions (M&A) strategy in Southeast Asia and Vietnam.
Specifically, JB Financial has paid around $16.1 million to wholly acquire Morgan Stanley Gateway Securities, which was established in 2006 with backing from international investment bank Morgan Stanley.
The local security firm’s capital was VND300 billion ($13 million) as of last year.
South Korea is one of the largest foreign investors in the Vietnamese financial industry, with a slew of lenders and brokerages pouncing on shares.
“The M&A was completed successfully, considering our payment was merely 1.05 times higher than Morgan Stanley Gateway Securities' equity capital which came toKRW18.9 billion ($15.3 million),” TheInvestor cited from JB Financial’s representative.
Previously, VIR also reported on JB Financial ramping up investment in Vietnam, Myanmar, and Cambodia.
Ki-Hong Kim, chairperson of JB Financial, highlighted that the company would increase its footprint in Vietnam, Myanmar, and Cambodia for overseas businesses. Hence, looking for potential tie-up deals is one of the most feasible ways to penetrate these markets.
“Southeast Asian nations are growing fast, while their banking infrastructure is growing,” Kim said. “Korea’s banking industry has matured, so we are turning to overseas markets spearheaded by consumer finance services.”
|JB Financial Group has acquired Morgan Stanley Gateway Securities
JB Financial is the parent firm of Jeonbuk Bank, Gwangju Bank, JB Woori Capital, and JB Asset Management.
According to TheInvestor, through its newly acquired firm, JB Financial will also provide domestic investors with investment strategies regarding real estate and infrastructure development in Vietnam. The group also plans to provide the Vietnamese companies with services like arranging corporate bond issuance or M&A advisory services.
According to South Korea’s Financial Supervisory Service, South Korean lenders’ business in Vietnam saw profits grow from $5.72 billion in 2017 to $6.43 billion in 2018. South Korean appetite also comes from the Vietnamese economy being on a solid footing with 7.02 per cent GDP growth in 2019.