Aegon sells US reinsurance business to SCOR
Dutch insurer Aegon has announced its US reinsurance business will be sold to French reinsurer SCOR in a deal set to recoup €630m for Aegon and help it pay back the Dutch state.
Aegon, which still owes the Dutch government €750m since its €3bn bailout in 2008, announced the transaction today which is due for completion in the summer.
SCOR will acquire Transamerica Reinsurance’s mortality business, currently owned by Aegon, in a move that will make the French firm the second largest life reinsurer in the US.
Of the €630m Aegon is expected to receive from SCOR, €340m will pay for Transamerica International Reinsurance Ireland, an Irish legal entity within the overall business.
Aegon meanwhile will grow a step closer in its aim to pay back the Dutch state by the end of June 2011. If the pledge is held, Aegon will become the first of the bailed-out Netherlands institutions to free itself from state support.
In its latest statement, Aegon reaffirmed its commitment to paying back the Dutch State as planned.
CEO Alex Wynaendts said: “This transaction is consistent with our focus on Aegon’s core business and supports our aim to complete repayment to the Dutch State by the end of June.”
CFO of Aegon Jan Nooitgedagt recently indicated an upcoming sale of part of its overall business was likely, in a statement issued with its 2010 annual report.
“Repurchasing the remaining portion of core capital – using internal resources, including any divestments – is a key priority,” he said.
At the same time, it emerged Nooitgedagt, Wynaendts, and the rest of the Aegon executive board planned to waive their bonuses for 2010. It followed an announcement in the previous week that ING Group CEO Jan Hommen and his board were giving up their cash bonuses, following an outcry by investors who knew the Group held an outstanding debt to the Dutch state.