Aegon may buy thrift company, tap U.S. government funds

AMSTERDAM (Reuters) - Dutch insurer Aegon NV (AEGN.AS)(AEG.N) said it may buy a small U.S. thrift company to qualify for potentially more than $1 billion in U.S. government support, sending its shares down more than 8 percent.

"This is part of our strategy to ensure Aegon has the strongest capital position possible," said Aegon spokesman Greg Tucker.

The range was between 1 percent and 3 percent of its $125 billion in U.S. assets, he said, and the application was for the so-called Troubled Asset Relief Program (TARP), which the U.S. government has used to help banks hit by the credit crisis.

In a statement issued later on Tuesday, Aegon said while it may be eligible for TARP funding, it had no need for additional capital beyond the 3 billion euros ($3.8 billion) injection agreed with the Dutch government last month.

Aegon shares initially fell as much as 8.5 percent, but trimmed losses after a positive opening to Wall Street. The shares closed up 2 percent at 3.53 euros. The DJ European insurance index .SXIP was up 0.7 percent.

"I think Aegon has bigger problems than we realize. They have invested precisely there where the problems are: the United States," said asset manager Fred Huibers of Dutch Haags Effectenkantoor, which does not own Aegon shares.

Aegon, which owns U.S. life insurer Transamerica and gets three-quarters of its operating profit from the United States, may buy a thrift company -- possibly Maryland-based Suburban Federal Savings Bank SUBF.PK -- to be eligible for the support, Tucker said.

Shares of Dutch rival ING were down 2.6 percent due to concerns over its U.S. investments and operations, but shares of peers like German Allianz (ALVG.DE) and French AXA (AXAF.PA) fell less or rose as their U.S. operations were smaller, Huibers said.

Aegon's Tucker said the company was not experiencing liquidity problems, and would use the U.S. money for its U.S. operations.

Some analyst said Aegon might repay part of the Dutch state's capital support after getting U.S. funds.

"The cost of a capital injection in the United States is at about half of what the Dutch government is charging," KBC analyst Dirk Peeters said in a note.

Aegon's plans are similar to those of Hartford (HIG.N), a life and property insurer that has been hit by investment losses, and peers Genworth Financial (GNW.N) Inc and Lincoln National (LNC.N) Corp, which are all planning to buy small savings and loans companies and apply for federal support.

Aegon expected a decision from the U.S. authorities before the end of the year, and any deal to buy a U.S. thrift company would also be concluded within that period, Tucker said.

A deal to buy a thrift company might take the form of a capital injection and the company concerned would not be a major institution, Tucker said. Suburban had about $300 million in assets, he said.

(Editing by John Stonestreet, Hans Peters and Andrew Macdonald)