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BKL Advises Tongyang Life Insurance on Comprehensive Share Exchange with Woori Financial Group
Bae, Kim & Lee LLC (“BKL”) advised Tongyang Life Insurance Co., Ltd. (“Tongyang Life”) on its comprehensive share exchange with Woori Financial Group Inc. (“Woori Financial”), through which Woori Financial acquired all remaining shares of Tongyang Life held by minority shareholders in exchange for newly issued Woori Financial shares. Upon completion of the transaction in August 2026, Tongyang Life became a wholly owned subsidiary of Woori Financial.
The transaction represents a significant restructuring of a major Korean financial group through a comprehensive share exchange between a financial holding company and its listed financial subsidiary. It is also one of the first major listed financial company restructuring transactions undertaken following the 2025 amendment to the Korean Commercial Act and the Ministry of Justice’s subsequent guidelines on directors’ conduct in corporate reorganizations.
Major Financial Group Restructuring Through a Comprehensive Share Exchange
The transaction attracted significant market attention as a large-scale financial group restructuring involving the acquisition of all minority-held shares in a listed financial subsidiary through a comprehensive share exchange.
It also marks a notable use of the comprehensive share exchange structure in Korea’s financial sector, approximately three years after Meritz Financial Group, also advised by BKL, made Meritz Fire & Marine Insurance and Meritz Securities its wholly owned subsidiaries through comprehensive share exchanges in 2023.
Applying Korea’s New Directors’ Duty of Loyalty and Shareholder Protection Framework
The transaction was pursued against the backdrop of significant changes to Korea’s corporate governance framework.
The Korean Commercial Act, as amended in 2025, expanded directors’ duty of loyalty to shareholders and expressly requires directors, in performing their duties, to protect the interests of all shareholders and treat all shareholders fairly.
On February 25, 2026, the Ministry of Justice also issued its Guidelines on Directors’ Standards of Conduct in Corporate Reorganizations, setting out procedures and considerations for enhancing fairness in mergers, share exchanges and other corporate reorganizations involving potential conflicts of interest between controlling and minority shareholders.
As one of the first major comprehensive share exchanges involving listed financial companies following these developments, the transaction presented an important question as to how the strengthened standards for directors’ duties and shareholder protection should be implemented in practice.
Independent Special Committee and Enhanced Minority Shareholder Protection
A key issue was how Tongyang Life’s board could fairly consider the interests of all shareholders and ensure both substantive and procedural fairness in a transaction through which its controlling shareholder would acquire all shares held by minority shareholders.
To address potential conflicts of interest, Tongyang Life established an independent special committee to review the purpose and necessity of the transaction, the fairness of the share exchange ratio and other key terms, the appropriateness of the transaction process, and measures to protect minority shareholders.
Tongyang Life also appointed independent legal and accounting advisers to support the special committee’s review. In addition, although an independent external appraisal of the share exchange ratio was not legally required, a separate valuation review was conducted by an external accounting expert as an additional measure to enhance transactional fairness.
These measures went beyond satisfying the formal legal requirements for a comprehensive share exchange and provided a procedural framework for implementing the strengthened duty of loyalty to shareholders in the actual decision-making process.
A Reference Point for Future Corporate Reorganizations
The procedures adopted in the transaction may provide an important reference point for future transactions involving the conversion of listed subsidiaries into wholly owned subsidiaries by financial holding companies, as well as mergers, comprehensive share exchanges and other corporate reorganizations involving potential conflicts of interest with controlling shareholders.
In particular, the transaction illustrates how independent review mechanisms, external expert advice, enhanced valuation procedures and minority shareholder protection measures may be incorporated into the decision-making process under Korea’s evolving corporate governance framework.
BKL’s Integrated M&A, Capital Markets and Financial Regulatory Advice
As legal counsel to Tongyang Life, BKL provided comprehensive advice throughout the transaction, from initial structuring through closing.
BKL advised on the transaction structure and timetable; reviewed and negotiated the comprehensive share exchange agreement; advised on corporate decision-making procedures involving the board of directors and shareholders’ meeting; and addressed the fairness and appropriateness of the share exchange ratio and other key transaction terms. BKL also advised on appraisal rights and other minority shareholder protection measures, the establishment and operation of the special committee, and the management of potential conflicts of interest.
BKL provided detailed advice on the decision-making process and substantive considerations required under the amended Korean Commercial Act to ensure that the directors’ duty of loyalty to shareholders was appropriately addressed throughout the transaction.
BKL also prepared and reviewed regulatory disclosure documents, including the securities registration statement and material event reports, and advised on financial regulatory matters under the Financial Holding Companies Act, Insurance Business Act and Financial Investment Services and Capital Markets Act.
In addition, BKL supported Tongyang Life in consultations and communications with the Financial Services Commission and the Financial Supervisory Service, including responses to regulatory inquiries and requests.
Drawing on its integrated expertise in M&A, capital markets and financial regulation, BKL supported Tongyang Life across the full lifecycle of the transaction—from structuring and internal decision-making to documentation, minority shareholder protection, regulatory disclosure and engagement with financial regulators.
Related Professionals: Mieun Roh Partner, Minkyung Song Partner, Jongmin An Partner, Seungjin Huh Partner, Soeun Han Associate, Byung Ryul Kim Associate, Yeon Doo Kim Associate
