Dutch bancassurer ING Group has entered into an agreement to purchase Santander's Latin American pensions businesses, in a bid to further strengthen the group's position in this rapidly growing market.

Under the terms of the deal, ING will acquire 100% of Santander’s shares of the pensions businesses for a total consideration of $1.3 billion, funded entirely from existing internal resources.

The acquisition, which includes the mandatory pension fund management companies (AFPs) located in Mexico, Chile, Colombia, and Uruguay, will make ING the second largest pension fund manager in Latin America. This transaction will extend ING’s pension expertise to two new countries, namely Colombia and Uruguay, both of which are showing an increasing demand for wealth management products.

Separately, ING has also revealed that it is currently engaged in talks with Santander regarding Santander’s pensions and annuities business in Argentina, which is not included in the acquisition at this stage.

Michel Tilmant, chairman of the executive board of ING Group said: This acquisition is in line with our strategy to support the strong organic growth of the group with suitable add-on acquisitions, while further strengthening our wealth accumulation business in developing markets. The transaction will give us a sustainable, scaled platform in this important region where we see attractive macro-economic and demographic trends that are driving demand for wealth management products.

Santander’s Latin American pensions business currently has more than 5.5 million customers and distributes its products primarily through a network of tied agents. ING’s pension expertise in the region, combined with the solid local management from Santander’s pension companies, is expected to facilitate a smooth integration and maximization of synergies to achieve ING’s growth targets.

The transactions are subject to various national regulatory approvals and are expected to close during the end of 2007 and in early 2008.