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Aegon mulls acquisitions in central, east Europe: CEO
THE HAGUE |
THE HAGUE (Reuters) - Dutch insurer Aegon (AEGN.AS) wants to expand in its key Asian, central and east European markets, and would consider acquisitions, including buying assets from Dutch bancassurer ING (ING.AS), Aegon chief executive Alex Wynaendts said on Tuesday.
Aegon, which received 3 billion euros in financial aid in the 2008 credit crisis, repaid the state in full in June 2011, the first bailed-out Dutch firm to do so.
That has paved the way for it to resume paying dividends and making takeovers.
"We have closed a chapter," Wynaendts told Reuters in an interview, adding that Aegon, which derives the bulk of its business from the United States, could now focus on expansion in fast-growth markets with rising incomes.
Wynaendts said Aegon would focus on markets where it already has a presence, which in Asia meant India, China and Japan.
In central and eastern Europe, the key markets of interest would be Poland, Hungary and Turkey, he said, "so we will put more emphasis on these three."
"The focus is on organic growth," Wynaendts said, adding that now Aegon has repaid the state, "we have the flexibility to consider acquisitions."
These could even include some of ING's insurance assets if those were sold piecemeal.
ING, which was also rescued by the state during the financial crisis, said in August it will not launch a stock market flotation for its insurance operations any time soon, adding that trade buyers were expressing interest in the assets.
But it said it would continue with its plans for two separate initial public offerings, one for its U.S. insurance operations, the other for its combined European and Asian business.
European Commission regulators seeking payback for the state bailout that ING received in the financial crisis have insisted it dispose of its 19 billion euro insurance business by the end of 2013.
"ING has said it wants to IPO the business," Wynaendts said, adding that if ING chose to sell the assets piecemeal "we certainly would be interested in looking."
Aegon divested several assets in order to repay state funds, cut costs and focus on new markets.
In August, it sold its UK-based Guardian Life unit to European buyout firm Cinven CINV.UL for 275 million pounds, and recently completed the sale of its Transamerica Reinsurance operations to French reinsurer Scor (SCOR.PA) for about $900 million.
But despite the asset sales and restructuring, Aegon's share price has fallen 38 percent so far this year and now trades at a discount of about 60 percent to book value, prompting some analysts to suggest it should consider a share buyback in order to create value for shareholders.
But Wynaendts ruled that option out.
"These are very uncertain times, we've just paid back the state, and this is absolutely not the time to do a share buyback," he said.
"Over five years we want to redeploy capital into markets. If we don't find the right opportunities then we would be looking at all alternatives. But the first thing is to pay a dividend."
Aegon said in June it aimed to increase underlying earnings before tax by an annual 7-10 percent, on average, from 2010-15 and that it plans to pay a 0.10 euro dividend over the second half of 2011 in May 2012.
(Reporting By Sara Webb)
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