A three-way takeover battle for MG Non-Life Insurance began Thursday, with Meritz Fire & Marine Insurance entering the prolonged race as a new contender.

According to local reports, three companies submitted letters of intent to participate in the fourth preliminary bidding for MG Insurance on Thursday. The contenders include Meritz Fire & Marine Insurance and private equity firms Dayli Partners and JC Flowers.

Meritz Fire, the non-life insurance arm of local financial holding company Meritz Financial Group, confirmed its participation Friday.

"We are currently reviewing all potential deals, and for this one, we participated at our optimal condition through thorough analysis of all available data," an official from the company stated, noting that the deals under consideration are not limited to insurance companies.

Meritz Fire's entrance brings a new dimension to the protracted race to find MG Insurance’s new owner.

Last month’s final bidding for MG Insurance’s third public auction failed, as preliminary participants Dayli Partners and JC Flowers did not submit bids. The previous two public auction attempts also collapsed due to a lack of contenders.

The substantial capital required to stabilize the debt-laden MG Insurance post-acquisition is a major reason for its ongoing sales struggle.

Approximately 1 trillion won ($733.8 million) is needed to stabilize the insurer, whose financial condition has deteriorated since being declared insolvent by the Financial Services Commission in April 2022.

While the estimated sale price of the insurer is between 200 billion and 300 billion won, industry estimates suggest that an additional 800 billion won will be required to normalize operations.

If Meritz Fire acquires MG Non-Life, it would mark the first merger and acquisition by Meritz Financial Group in almost a decade, following the group's takeover of I'M Investment & Securities in 2015. Meritz is a major financial group, ranked fourth in market capitalization behind banking holding firms KB, Shinhan and Hana.

The state-run Korea Deposit Insurance Corporation, entrusted with the job of MG Insurance's public sales by the FSC, will review the proposals and capacities of the three bidders and decide the preferred bidder soon.

For the potential buyer, KDIC will offer a choice between M&A or purchase and assumption (P&A) -- the latter involving asset purchases and debt assumption -- to ease the financial burden. In either case, the state-run institution plans to provide several hundred billion won in financial support during the acquisition.