ING agrees to sell 11.3% direct stake in SulAmérica to Swiss Re

The FINANCIAL — ING has reached an agreement with Swiss Re Group on the sale of an 11.3% direct stake in Sul América S.A., further reducing its stake in the Brazilian insurer, according to ING Groep N.V.

Under the terms agreed, ING will sell approximately 37.7 million SulAmérica units for a total cash consideration of approximately EUR 185 million (at current exchange rates). The transaction is expected to result in a net gain to ING of approximately EUR 100 million at closing. In accordance with IFRS, this gain represents the difference between the book value and the fair value for both the 11.3% stake in scope of the agreement announced today and the stake retained. This stake will be accounted for as an investment at fair value going forward, according to ING Groep N.V. In line with previous announcements, ING intends to use the proceeds of this transaction to reduce ING Group core debt.

The transaction announced today is part of ING Group’s strategy to divest its Insurance and Investment Management activities. The transaction reduces ING’s stake in SulAmérica to 10%, assuming completion before year-end of a transaction (announced on 28 February 2013) under which ING agreed to sell a stake of approximately 7% to the Larragoiti family, SulAmérica’s main shareholder, swap its remaining indirect stake for tradable shares, and unwind the existing shareholder’s agreement. ING and the Larragoiti family established the insurance joint venture SulAmérica in 2002. ING will review options for the divestment of its remaining 10% stake as and when appropriate.

SulAmérica is the largest independent insurance group in Brazil, with operations in several insurance lines. Its business lines are supported by diversified distribution capabilities that, as of December 2011 included a network of more than 30,000 independent insurance brokers. SulAmérica also has partnerships with more than 20 financial- and retail institutions, adding a further 16,000 points of sale, according to ING Groep N.V.

The Swiss Re Group is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Subject to regulatory approvals, the transaction is expected to close before year-end 2013.