Vienna Insurance Group (VIG) acquired the business of the Dutch insurer Aegon in Hungary for €620 million ($682.6 million) after receiving approval from Hungarian regulatory authorities.
The deal, which closed on March 23, 2022, includes the purchase of two Dutch holding companies (Aegon Hungary Holding B.V., Aegon Hungary Holding II B.V.), which hold 100% of the shares in the Hungarian Aegon companies.
VIG now holds a 55% stake in these businesses, while the Hungarian state-owned holding company Corvinus will hold a 45% stake, in a separate acquisition that is scheduled to be completed on March 25. VIG had previously agreed to share the ownership of the businesses with Corvinus in order to salvage the deal, which the Hungarian government had blocked.
The VIG Group will retain a controlling majority and the operational management of the Hungarian company.
Market Leader
Together with the existing VIG insurance company UNION, VIG will become the market leader in Hungary with a market share of over 19%.
According to preliminary figures, the premium volume of the Hungarian Aegon insurance company amounted to €401 million ($441.5 million) and the profit before taxes was €51 million ($56.2 million) in 2021. Around 1,000 employees serve more than 1.5 million insurance customers.
“With the closing in Hungary, we will achieve our target of being among the top three in the market by the end of 2025 already in 2022 and take over the market leadership in Hungary. We acquire very well positioned companies that enrich our broad diversification and offer us new opportunities in asset management and pension fund business. These are two business areas that we want to intensify and expand as part of our ongoing strategy programme VIG 25,” explained CEO Elisabeth Stadler, in a statement.
On Nov. 29, 2020, Aegon agreed to sell its insurance, pension, and asset management businesses in Central and Eastern Europe (CEE) for VIG for €830 million ($913.7 million). VIG is waiting for local regulatory approvals before proceeding with the acquisition of Aegon’s remaining CEE business with companies in Poland, Romania and Turkey.
Aegon said the sale of its Hungarian businesses will result in a significant increase in its cash capital, while providing the company with the financial flexibility to reduce its debt, via a €375 million ($412.8 million) tender offer, and complete a €300 million ($330.3 million) share buyback.
The completion of the sales “marks an important step in the transformation of Aegon as we narrow our strategic focus to select core and growth markets, and further strengthen our balance sheet,” said Lard Friese, CEO of Aegon.
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