Aegon NV is combining its operations in the Netherlands with insurer ASR Nederland NV, in a bid for market dominance in the pension, life and non-life insurance sectors.
Aegon agreed to a conditional deal for a total consideration of €4.9 billion ($4.9 billion), ASR Nederland said in a statement Thursday. Dutch insurance giant Aegon will receive a 30% stake in a.s.r. and €2.5 billion in cash proceeds from the deal, which it plans to use to return €1.5 billion in capital to shareholders.
Aegon will also cut its leverage by as much as €700 million and raise its 2023 dividend per share target to around €0.30. ASR Nederland raises its divided by 12% to €2.70 per share for the year and is targeting annual mid-to-high single digit dividend growth until 2025.
ASR Nederland shares gained as much as 8.5%, the most since November 2020. Aegon shares were up 7.5% at 4.7 euros apiece as of 9:16 a.m. local time after jumping as much as 9.8%.
“Customers of both companies will benefit from a more diversified product offering and strong distribution,” said Aegon’s Chief Executive Officer Lard Friese.
Organic capital creation of the merger is expected to amount to about €1.3 billion by 2025, of which about €600 million comes from the acquired Aegon businesses. The transaction is expected to close in the second half of 2023.
ASR Nederland’s executive board will remain unchanged after the merger. The term of the Dutch firm’s Chief Executive Jos Baeten will be extended until the annual general meeting of 2026 to oversee the integration.
Topics Carriers
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