* ING to reduce stake in insurer by 7.2 percent
* Controlling shareholder to buy stake from ING
* Stock down 3.1 pct, steepest drop in six weeks
By Guillermo Parra-Bernal and Aluísio Alves
SAO PAULO, Feb 28 ING Groep NV, the
biggest Dutch financial services company, agreed on Thursday to
reduce its stake in Brazilian insurer SulAmérica Seguros e
Previdencia SA, raising funds to help repay a state
bailout received after the global financial crisis.
Under terms of the deal, ING will sell a 7.2 percent stake
in SulAmérica to Brazil's Larragoiti family, the Brazilian
company's controlling shareholder, according to a securities
filing. The transaction leaves ING with a 28.8 percent stake in
SulAmérica, Brazil's third-largest insurer, the filing added.
Based on SulAmérica's closing price on Wednesday, ING might
have raised 346 million reais ($176 million) from the sale. The
value of ING's remaining stake in SulAmérica is worth about 1.4
billion reais, according to Thomson Reuters calculations.
Shares slumped 3.1 percent on Thursday, their biggest
intraday drop in at least six weeks, on concern ING could be
tempted to dispose of its remaining stake in the local equity
markets as no potential strategic bidders apparently look
interested in SulAmérica. ING has for years stated that it
intends to exit SulAmérica - which has weighed down the stock.
"The main mechanism for ING to divest its remaining shares
in the company now is via the capital markets, which could
create an overhang," wrote Goldman Sachs Group analyst Carlos
Macedo in a client note.
SulAmérica fell to as low as 18.88 reais, after hitting a
record-high 19.58 reais earlier in the day. The stock is up 7.3
percent this year.
The agreement allows the Larragoitis to regain exclusive
control of SulAmérica, the company they founded 117 years ago.
Upon conclusion of the deal, the family's stake will increase to
31.9 percent from a prior 24.8 percent. At the same time, ING
agreed to a 5-year non-compete clause and to keep a board member
in SulAmérica until its stake drops south of 10 percent.
"We found an understanding that was beneficial for both
parties alike - our family was looking to consolidate control of
the company," said Patrick de Larragoiti Lucas, the family's
Larragoiti told investors in a conference call that his
family is not considering a plan to list SulAmérica in the "Novo
Mercado" chapter of the São Paulo Stock Exchange - where
companies trade at a premium because of greater corporate
The Amsterdam-based insurance giant is facing regulatory
pressure to shed industry assets in Asia and other regions by
the end of 2016 as part of a 10 billion euros ($13.1 billion)
bailout package it received in 2008. Late in 2011, ING exited
most of its Latin American pension business, raising about $3.5
billion from the sale.
On Wednesday, the Brazilian insurer posted a 19 percent jump
in fourth-quarter net income, as revenue was propped up by
gradual increases in the value of premiums throughout the year
and efforts by Chief Executive Officer Thomaz de Menezes to
streamline operating costs.
Neither SulAmérica nor ING disclosed the value of the deal.
The transaction is subject to clearing from Brazilian and Dutch