Aegon has agreed to sell its businesses in Czech Republic and Slovakia for €155m to NN Group. The transaction is consistent with Aegon’s strategic objective to optimize its portfolio and capital allocation across its businesses.
The businesses in Czech Republic and Slovakia predominantly provide unit-linked products in addition to offering term life products and a wide range of riders, as well as pension services in Slovakia. In 2017, underlying earnings before tax of the combined operations amounted to €16m.
“This divestment is a further step in rationalizing our geographical footprint and focusing our resources on our key markets”, said Alex Wynaendts, chief executive of Aegon, in a statement.
“The transaction guarantees continued customer service, offers new opportunities for employees, and is in the best interest of our shareholders”.
The proceeds from the divestment will be upstreamed to the group. Based on the book value as of December 31, 2017 and taking into account dividends paid in 2018, the book gain is expected to amount to approximately €80m and will be reported in Other income.
The transaction will be funded from existing cash resources and is not expected to have a material impact on the operating result and Solvency II ratio of NN Group. The deal is expected to close by the end of the first quarter of 2019.
Dutch NN Group provides retirement services, pensions, insurance, investments and banking to approximately 17 million customers.