Vienna Insurance Group will buy Dutch insurer Aegon’s Central and Eastern European business for 830 million euros ($993 million), cementing Vienna’s regional lead and raising cash for Aegon to cope with the coronavirus crisis.
The deal includes insurance companies, pension funds, asset management and service companies in Hungary, Poland, Romania and Turkey with a premium volume of around 600 million euros, a managed pension fund volume of around 5 billion euros and a customer base of 4.5 million, VIG said on Monday.
In 2019, the assets generated a net profit of around 50 million euros with around 1,650 employees, it added.
Aegon announced the deal, which is set to close in the second half of 2021, on Sunday.
“The acquisition of the Central and Eastern European business of Aegon is an important step for our group to sustainably strengthen our leading position in CEE and to take advantage of new opportunities,” VIG Chief Executive Elisabeth Stadler said in a statement.
“The portfolios of the companies included in the scope of the transaction perfectly complement our existing units and strengthen our diversification in these countries. In Hungary, we are making the leap to the top.”
Aegon Chief Executive Lard Friese said: “This transaction will simplify Aegon’s footprint and strengthen our balance sheet.”
In October, Reuters reported that the Dutch insurer had put its Eastern European business up for sale and was working with JPMorgan on the process.
Aegon suffered a 30% drop in underlying pretax earnings in the first half of 2020 due to higher mortality and lower interest rates in the United States, where it owns the Transamerica brand and where it does two-thirds of its business.
Source: Reuters.com