Prudential, Korea Life to bid for Tong Yang Life stake

SEOUL (Reuters) - Prudential Financial Inc (PRU.N), the No.2 U.S. life insurer, and Korea Life Insurance (088350.KS) plan to submit separate initial bids for a controlling stake in Tong Yang Life Insurance (082640.KS), sources familiar with the matter said on Wednesday.

The race over the South Korean life insurer comes against a backdrop of rising interest in the sector in the region.

Local private equity firm Vogo Fund is seeking to sell an up to 60.7 percent stake in Tong Yang, worth about 850 billion won ($742 million) at the current market value. Initial bids for Tong Yang are due on Wednesday.

The sources declined to be named as the information had yet to be made public.

AIA Group (1299.HK), Asia's No.3 insurer and about one-third owned by American International Group Inc (AIG.N), may bid for the $6 billion Asian insurance operations of ING Groep, which are heavily skewed toward South Korea and Japan.

ING's Korean business is also drawing interest from local banking groups such as KB Financial Group (105560.KS) and Woori Finance Holdings (053000.KS), which are searching for new avenues for growth outside the already saturated banking sector.

Woori had also shown interest in Tong Yang but has dropped its bid plan, according to a source.

Prudential's Korea office and Korea Life Insurance declined to comment.

Shares in Tong Yang Life ended down 2.2 percent, versus the broader market's .KS11 flat finish. ($1 = 1145.5500 Korean won)

(Reporting by Ju-min Park; Editing by Jonathan Hopfner)