Dutch financial services provider ING Group has reached an agreement to sell most of its Latin American insurance operations to Grupo de Inversiones Suramericana for about EUR 2.7bn.
As a part of this acquisition, ING will receive around EUR 2.62bn in cash and Gruposura will assume EUR 65m in debt. Additionally, earnings until closing will remain with ING.
ING expects the sale to deliver a net transaction result of around EUR 1bn, which includes cash proceeds, debt reduction in Latin America, and the extraction of excess capital before closing, is expected to reduce the leverage in ING Insurance by around EUR 2.8bn euros.
The transaction doesn’t include ING’s 36% stake in Brazilian insurer Sul America SA, which will be sold separately. Mortgage and Leasing businesses of ING are not part of the deal.
According to ING, the businesses being sold together serve over 10 million clients through around 7,000 employees and have assets under management of EUR 49bn and earned EUR 192m in net income in 2010, on roughly EUR 670m in revenues on an IFRS basis.
The deal, expected to close by the end of this year, will create a business with over 25 million customers, $120bn worth of assets under management and operations across eight countries in Latin America.