South Korea

This $2.9bn deal was a large and significant transaction among the most recent wave of banking sector consolidation in Korea, creating the second-biggest bank in Korea by assets and positioning Shinhan Bank as the only competitive threat to the market leader, Kookmin Bank.

A key achievement was the high possibility that the deal would yield a profit on the government’s original investment in 1999 of $2.3bn. The sale was completed at a 56% premium to trading price with an implied stated book value multiple of 1.8.

Fifty-one per cent of the government shares were sold for cash, 25% exchanged for Shinhan redeemable preferred shares, and the remaining 24% exchanged for Shinhan redeemable convertible preferred shares.