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BRUSSELS, May 26 (Reuters) - Belgian insurance company Ageas said on Monday it had paid 122.5 million euros ($167 million) to acquire the non-life activities of its Portuguese joint venture with Millenniumbcp.
Under the deal, Ageas bought the remaining 49 percent stakes in Medis and Ocidental Seguros from the venture, Millenniumbcp Ageas. Millenniumbcp will still distribute life and non-life products of Millenniumbcp Ageas on an exclusive basis until the end of 2029.
The joint venture partners have agreed to divide up excess capital of 290 million euros in the form of dividends and capital reduction, meaning the total operation would be cash positive for Ageas.
Ageas said the transaction was in line with its stated ambition to increase its presence in non-life activities and would also help it realise a return on equity of 11 percent in 2015.
"Portugal is a market that we know well and is characterised by still low penetration rates. With our track record of very low combined ratios, we believe this market represents a promising opportunity for our group," Ageas CEO Bart De Smet said.
"MBCP will continue to be an important distribution partner for our life and non-life activities. At the same time it creates an opportunity to expand our distribution reach in non-life beyond the current channels."
In 2013, the non-life activity reported gross inflows of 251 million euros, with private health insurer Medis the largest activity. The non-life business reported a profit of 12 million euros.
The deal involves a possible one-off price adjustment after four years and is subject to regulatory approval. ($1 = 0.7336 Euros) (Reporting By Philip Blenkinsop; editing by Tom Pfeiffer)