South Korean regulators on Friday endorsed Hana Financial Group Inc.'s 3.9 trillion won ($3.48 billion) acquisition of Korea Exchange Bank, paving the way for U.S. private-equity firm Lone Star's sale of the local lender and closing the final chapter of a drawn out and acrimonious saga.

The Financial Services Commission said in a statement that the acquisition did not violate antitrust rules.

Following two collapsed deals, legal fights, an office raid, dumped advisers, bad press, a financial crisis, and rapid market recovery, Lone Star has been keen to conclude one of the most contentious and widely publicized private-equity exits in Asia.

Since they first reached a deal in November 2010, Hana, the country's No.4 financial-services group by assets, and Lone Star twice lowered the sale price while awaiting regulatory approval.

The regulatory delays that have plagued Hana's planned purchase of the 51 percent stake in KEB also came along with a guilty verdict against the Texas-based buyout fund on charges of stock manipulation in a relation to absorbing a credit-card unit of KEB.

Industry growth is expected to slow in the country's saturated banking market. Banking groups such as Hana are seeking new avenues for growth in nonbanking assets or via acquisitions as the sector is already highly competitive.

Acquiring top foreign-exchange specialist KEB is crucial for Hana because the country's banking sector is quickly consolidating and the company has most of the financing for the deal in place.

Lone Star bought KEB for $1.2 billion in 2003 and sold down part of its stake in 2007. It had previously attempted to sell KEB to Kookmin Bank for $7.3 billion in 2006 and to HSBC Holdings PLC for $6.3 billion in 2008.

Singapore's DBS Group Holdings Ltd. twice held talks on a purchase, but did not come to an agreement. Australia and New Zealand Banking Group Ltd. entered the fray in 2010 before losing out to Hana.

Under the renewed contract, Hana offered Lone Star 11,900 won per share, 46 percent higher than the stock's Friday close.

Since acquiring control of KEB, the U.S. fund has recouped more than its total 2.1 trillion won investment through a block sale and dividends.