Aegon to sell Central and Eastern European business to VIG

Aegon has agreed to sell its insurance, pension and asset management business in Hungary, Poland, Romania and Turkey for €830 million to Vienna Insurance Group (VIG).

The proceeds will be upstreamed to the group and increase Aegon's financial flexibility to execute on its strategic priorities, including "deleveraging".

The transaction amounts to €830 million and represents a multiple of 2.6 times the book value on June 30, 2020. This is expected to result in an increase in IFRS equity of €505 million of which €362 million will be recognized as book gain based on the balance sheet position on June 30, 2020.

The total net underlying earnings of Aegon’s businesses in Central and Eastern Europe amounted to €54 million for 2019, implying a transaction multiple of 15 times net underlying earnings. As a result of the transaction, the group Solvency II ratio is estimated to improve by approximately 8 percentage points.

The transaction is expected to close in the second half of 2021.

Lard Friese, Aegon chief executive officer, said: “This transaction will simplify Aegon’s footprint and strengthen our balance sheet. We are sharpening our strategic focus and are concentrating on those countries and business lines where Aegon can create most value.

"I would like to thank our employees in Hungary, Poland, Romania and Turkey for their significant contribution to Aegon over the years. We believe that our businesses will benefit greatly from the vast experience of VIG, a leading insurance group in the region.”