South Korea’s KB Financial Group announced Friday it signed a deal to buy out the Korean unit of U.S. Prudential Financial Inc. for 2.27 trillion won ($1.87 billion).

KB Financial Group disclosed that it entered into a share purchase agreement with the U.S. headquarters to buy the entire stake in the midsize life insurer in cash. It won the rights after outbidding private equity candidates Hanh & Company and MBK Partners.

The parties agreed to skip the normal M&A procedure of designating a preferred bidder and undergoing a due diligence period.

The news lifted KB Financial Group shares by 3.54 percent to 33,650 won on Friday.

The acquisition will help KB Financial Group bolster its relatively weak non-banking units and reclaim the leading financial house position lost to Shinhan Financial Group last year.

By combining Prudential Life, Korea’s 11th largest life insurer by assets, with KB Life Insurance Co., the 13th largest in Korea, it is likely to jump to No. 5. Prudential Life had 21.1 trillion won in assets as of late 2019, with a net profit of 140.8 billion won for the full year.

The merger requires approval from the financial authorities.

Prudential Life had been considered an attractive buy given its favorable insurance contracts and sound financial position. Its risk-based capital ratio, a key measure of an insurer’s financial strength, was 515 percent as of September 2019, one of the highest in the industry.

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