Dutch insurance specialist Aegon has entered into an agreement to merge its Polish pension fund management company PTE Ergo Hestia with Bre Bank's pension company PTE Skarbiec-Emerytura.

As part of the agreement, Bre Bank has granted Aegon an option to acquire its shareholding in the combined pension fund, once the merger process completes. The purchase price will amount to approximately E100 million.

This deal will strengthen Aegon’s position in the rapidly-growing Polish pension market and marks another step toward further expanding the group’s business in central and eastern Europe. Together, PTE Ergo Hestia and PTE Skarbiec-Emerytura will become the fifth largest pension fund management company in Poland, with a market share of approximately 5%. Combined, the two funds have more than 800,000 members and nearly E1.7 billion assets under management.

Donald Shepard, Aegon’s chairman and CEO, said: Our strong and expanding business in Poland is key to Aegon’s central and eastern European growth strategy. Pensions are one of Aegon’s core strengths and, as such, we welcome this opportunity with Bre Bank to further enhance Aegon’s ability to provide quality and reliable retirement solutions to customers throughout Poland.

The transaction is subject to regulatory approval from Poland’s Financial Supervision Commission (KNF) and the country’s Office of Competition and Consumer Protection (OCCP).

At present, Aegon has pension and life insurance operations in four countries in central and eastern Europe, and aims to expand its businesses in the region over the next few years.