KG Group is pursuing the sale of its auto finance subsidiary KG Capital, according to investment banking industry sources on July 26. The conglomerate has appointed Samjeong KPMG as the lead advisor and is currently seeking buyers for the 100% stake held by group affiliates including KG Inicis and financial investor Cactus Private Equity, with the transaction size discussed at approximately 40 billion won. The divestiture follows KG Group's April agreement to acquire K Car Capital from Han & Company for around 200 billion won, prompting the group to streamline duplicate auto finance assets. The move aligns with an active merger and acquisition trend in South Korea's capital sector, where Kakao Bank recently agreed to acquire Marston Capital and Hanwha Life was selected as the preferred bidder for Acuon Capital.
KG Capital Transaction Details and Asset Profile
KG Capital provides new and used vehicle installment financing services. As of March end, the company reported total assets of 159.2 billion won and equity capital of 37.9 billion won. The sale process is currently in the buyer identification stage, with KG Group seeking to divest the entire 100% stake held by group entities and Cactus Private Equity. Industry sources indicated the transaction value is being discussed at approximately 40 billion won.
KG Group Streamlines Auto Finance Portfolio After K Car Capital Acquisition
In April, KG Group signed a share purchase agreement to acquire K Car Capital from Han & Company for approximately 200 billion won. K Car Capital has equity capital of 171.7 billion won. Once the K Car Capital transaction closes, KG Group will hold multiple auto finance subsidiaries within its portfolio. Industry observers noted the KG Capital sale represents an efficiency measure to eliminate redundant assets in the same business segment.
Recent Capital Sector M&A Activity in South Korea
Merger and acquisition activity involving capital companies has intensified. Kakao Bank agreed to acquire Marston Capital. Hanwha Life was selected as the preferred bidder for Acuon Capital, which has equity capital of approximately 1 trillion won, marking the insurer's entry into the capital business. Nonghyup Bank is pursuing the acquisition of Deragelandon, a capital company specializing in medical equipment leasing.
KG Group's Expansion Through Acquisitions
KG Group has expanded operations through aggressive M&A activity. In the 2000s, the group acquired KG Inicis and KG Financial, increasing its scale. In 2019, KG Group successfully acquired Dongbu Steel (now KG Steel). In 2022, the conglomerate acquired the then-loss-making SsangYong Motor (now KG Mobility), which achieved consecutive annual profits from 2023 to 2025, demonstrating successful operational turnaround. In the current year, KG Group signed share purchase agreements to acquire K Car and K Car Capital, with transaction closings pending.
FAQ
Why is KG Group selling KG Capital?
KG Group is divesting KG Capital to streamline its auto finance operations after agreeing to acquire K Car Capital in April. The sale eliminates duplicate assets within the same business segment, as both companies provide vehicle financing services.
What is the transaction size for the KG Capital sale?
Industry sources reported the transaction size is being discussed at approximately 40 billion won for the 100% stake held by KG Inicis and other group affiliates along with financial investor Cactus Private Equity.
