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March 23 (Reuters) – Aegon (AEGN.AS) has completed the sale of its Hungarian branch to Vienna Insurance Group (VIG) (VIGR.VI) for 620 million euros ($682 million), the Bank said on Wednesday. Dutch insurer.
Aegon had announced an €830 million sale of its Central and Eastern European insurance, pensions and asset management businesses to VIG in 2020, but the Hungarian government initially blocked the deal.
Late last year, however, the country’s finance ministry said it had signed a memorandum of understanding with VIG that could see it take a 45% stake in the two companies’ local unit, and the European Commission then ordered Hungary to withdraw its veto.
Right-wing nationalist Prime Minister Viktor Orban has repeatedly said that Hungarian companies or the state should have majority stakes in sectors such as finance, energy, media and commerce.
Aegon, which plans to complete the sale of its Polish, Romanian and Turkish businesses this year, said in a statement that the sale was an important step towards tightening its strategic focus and strengthening its balance sheet.
The group said the increased cash would help it reduce its debt and announced a €375 million redemption tender offer as well as a €300 million share buyback. April to December.
Following the debt tender offer, Aegon expects to have reduced its gross leverage to 5-5.5 billion euros.
($1 = 0.9089 euros)
Reporting by Sarah Morland; edited by Jason Neely and Barbara Lewis
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