Hana Financial Group said in a regulatory filing to the Korea Exchange on Friday that it has reached an agreement with Lone Star Funds on an 11 percent cut in takeover price for Korea Exchange Bank.

The official announcement, issued right after Hana held a meeting of board members Friday afternoon, marks the beginning of the last phase of the long-protracted acquisition deal that spawned a series of heated public disputes, legal wrangling and rampant speculation about pricing.

Under the new deal, Hana will buy the KEB stake for 3.9 trillion won ($3.5 billion) or 11,900 won per share, lower than its earlier offered price of 4.41 trillion won.

Hana group’s chairman Kim Seung-yu is scheduled to fly to the U.S. to ink the contract with the buyout fund.

The takeover deal, which dragged on for a year, involves Lone Star Funds’ 51.02 percent stake in KEB, and will be officially over once the group secures final approval from the country’s financial regulators.

Given that the Financial Services Commission had earlier hinted at giving a green light to the deal, Hana is widely expected to wrap up the takeover soon and emerge as Korea’s third-largest financial group with combined assets of 309 trillion won.

The latest cut of 11 percent is bigger than market expectations, but falls far short of the level demanded by the KEB labor union, which called for a larger discount of up to 2 trillion won.

Hana’s public disclosure on the stock market came two weeks after the financial regulator ordered Lone Star to sell off its stake in KEB to below 10 percent within six months.

The U.S. private equity fund had become an illegitimate major shareholder of KEB following a court ruling that found the fund guilty of stock manipulation over its merger with KEB’s card operation in 2003.

By Yang Sung-jin (insight@heraldcorp.com)