Aegon sells Transamerica reinsurance for $1.4B - East Valley Tribune: Business

Aegon sells Transamerica reinsurance for $1.4B

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Posted: Monday, April 25, 2011 11:50 pm

(AP) — The bailed-out Dutch insurer Aegon NV says it has agreed to sell the reinsurance business of its Transamerica arm to France's Scor SE for $1.4 billion in cash and capital.

The Hague, Netherlands-based Aegon said it will use the proceeds to repay the remaining euro750 million ($1.09 billion) of the euro3 billion in support it received from the Dutch state during the 2008 financial crisis, and will now focus on its life insurance, asset management and pensions businesses.

Scor said Tuesday it is paying $912.5 million, which it will finance with cash on hand or debt, and won't issue shares. The rest of the bid price will be covered by capital released, which is money Aegon will take from the reinsurance unit before handing it over to Scor.

It said the deal will make it the second-largest life reinsurance company in the U.S., and strengthen its Asian and Latin American operations.

The operations sold had net profit of $102 million in 2010, Aegon said.

Analyst Lemer Salah of SNS Securities said the deal was positive for Aegon as it would help rid the company of the taint of having needed to accept government help to remain solvent, and would allow it to focus on fewer markets. He rates shares a buy.

Aegon shares rose 3.3 percent to euro5.383 on the Euronext exchange in Amsterdam, while Scor was up 0.4 percent to euro19.49 on the same exchange in Paris.

Scor's headquarters are in Paris, but it is one of the few companies to be incorporated "in Europe" rather than in any specific country, which gives it the unusual SE or "Societas Europaea" corporate designation.

Aegon had net profit of euro318 million in the fourth quarter, its most recent reporting period, and euro418 million for the full year 2010.

Scor said that it would keep Transamerica Re's current management in place under president Paul Rutledge, merging it with Scor's smaller existing Global Life reinsurance arm. Transamerica Re is headquartered in Charlotte, North Carolina, and has 451 employees.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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