Shinhan to Acquire 77.04% of Lotte Insurance for 693,338,632,300 Won
Key Facts
Shinhan Financial Group’s board approved the acquisition of a 77.04% stake in Lotte Insurance on October 13, 2026, making the insurer a subsidiary of the group, according to Shinhan’s filing with the U.S. Securities and Exchange Commission. The filing set the cash consideration at 693,338,632,300 Korean won for the purchase of 239,082,287 shares. The deal value is equivalent to 1.15% of Shinhan’s capital, the filing said. The group said it aims to strengthen its competitiveness through participation in Lotte’s management. The move comes as Shinhan seeks to add a non-life insurance business to its operations, but the transaction remains subject to regulatory approvals and related procedures.
Korean media coverage has identified Bigtura, an affiliate of private equity firm JKL Partners, as the seller, while the publicly available official filing does not name the selling party. Shinhan did not set a date for completing the acquisition, saying closing depends on obtaining regulatory approvals and completing related procedures. It also said the final consideration may change before the deal is completed. After securing approval, the group plans to acquire the remaining shares in Lotte. The plan includes merging the insurer with Shinhan’s existing non-life insurance arm, Shinhan EZ General Insurance, The Korea Herald reported.
Lotte would add about 3.34 million customers to the group, and its contractual service margin stood at 2.2 trillion won at the end of the first half of 2026, according to The Korea Herald. The margin is a key indicator of the future profitability of insurance operations. Recent performance, however, has highlighted challenges: the company recorded a net loss of 18.5 billion won in the first half of 2026, according to The Korea Times. Investment losses totaled 78.5 billion won, exceeding insurance service profit of 53.7 billion won over the same period. Shinhan therefore faces the task of combining Lotte’s customer base and contractual margin with the need to address profitability pressures.
On capital, Lotte’s core capital ratio under the K-ICS standard remained at negative 5.4% at the end of June 2026, despite improving by 16 percentage points in the second quarter, according to The Korea Herald. At the same time, its solvency ratio was 129.7% at the end of June, below the regulatory recommended level of 130%, The Korea Times reported. The Korea Herald said the company is operating under a financial improvement plan approved by the Financial Services Commission with conditions. An analyst at SK Securities said meeting capital requirements solely through internal profits could be difficult without additional capital increases. The Korea Times also reported that the transitional regulatory framework requires insurers to raise their core capital ratio to at least 50% of required capital by 2035.
Lotte’s annual results show a mixed picture: net income was 51,331 million won in 2025, compared with 24,221 million won in 2024, while shareholders’ equity fell from 794,239 million won to 613,504 million won between the two years, according to official filing data. Shinhan expects the normalization of Lotte’s operations, a reduction in losses at Shinhan EZ and an increase in consolidated profits to add 120 billion won to group earnings over three years, CHOSUNBIZ reported. Market reaction after the announcement was negative: Shinhan shares fell 4.31% on the following Wednesday, then dropped a further 0.84% on Thursday, according to The Korea Times. An analyst at NH Investment & Securities also said Lotte may not pay dividends until 2035, even if its turnaround proceeds as planned. The analyst added that the deal’s valuation will depend on a recovery in the insurer’s profits and an improvement in Shinhan’s return on equity over the next two to three years; SHG shares closed at $66.3 on October 23, 2026, according to EL7 data.
Shinhan said existing insurance contracts and customer services will remain unchanged during the integration period, according to The Korea Herald. The group’s earlier filing in June said the potential acquisition was still under review and that no final decision had been made, in response to a media report published on June 29, 2026. The board’s October decision moved the deal from review to an acquisition decision, while closing remains subject to approvals and related procedures. The next steps announced by the group are to complete the regulatory process, then buy the remaining shares and proceed with the planned merger with Shinhan EZ. The deal’s impact on group earnings will be tested through the recovery path outlined in coverage over the coming years.