Aegon buys 2 firms

November 11, 2006|By Laura Smitherman | Laura Smitherman,Sun reporter

Dutch insurer Aegon NV, which runs its U.S. operations from Baltimore, continued an acquisition streak this month with the purchase of a pension-fund management company in Poland and the buyout of a life insurance and benefits-consulting company outside Chicago.

Aegon has been expanding its global footprint in the past year in such markets as China and Mexico, and the company has up to $2.6 billion in available capital that could be used to make acquisitions. Chairman Donald J. Shepard has said he is continually looking for strategic acquisitions to enter or grow in a market, though a large-scale deal might not be in the offing.

Shepard "doesn't see any big deals on the horizon," Aegon spokesman Gregory W. Tucker said yesterday. "We are open to opportunities but at the right price and in the right circumstances. It has to make sense."

This week Aegon announced it agreed to buy PTE Ergo Hestia in Poland, a move that builds on its acquisition last year of Nationwide Poland, a life insurance company. Aegon did not disclose how much it would pay for PTE. The deal, which is subject to approval by Polish financial and antitrust authorities, is expected to be completed early next year.

Earlier this month, Aegon announced a separate agreement to acquire U.S.-based Clark Inc., which specializes in the sale of corporate-owned and bank-owned life insurance and other benefit programs, for $293 million in cash. Aegon had been Clark's largest corporate shareholder with a 13 percent stake.

As part of the transaction, a management group at Clark will acquire other business segments, including compensation consultant Pearl Meyer & Partners and Clark's Healthcare, and form a privately held company. The transaction also is expected to close early next year.

Shepard has said the company is focused on boosting profitability. Aegon reported this week that third-quarter net income climbed 10 percent to $866 million as the company saw gains from investments that it holds to pay potential claims. Profit for the first nine months of the year, including the quarter, was down 4 percent.

Earnings from Aegon's traditional life insurance business fell 1 percent in the quarter from the corresponding period last year, while accident and health insurance grew 42 percent. Earnings from fixed annuities dropped more than 34 percent.

Shares of Aegon closed yesterday at $18.65, up 10 cents, on the New York Stock Exchange.

laura.smitherman@baltsun.com

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