Bloomberg News

Aegon Cleared of State Aid With Final $1.06 Billion Payment

June 15, 2011

(Updates with CEO comment in fourth paragraph.)

June 15 (Bloomberg) -- Aegon NV, the Dutch owner of U.S. insurer Transamerica Corp., repaid the final tranche of state aid to the Netherlands, releasing the firm from European Union- imposed constraints on dividends and acquisitions.

Aegon will transfer 750 million euros ($1.06 billion), plus a 50 percent premium, to the Dutch state today, The Hague-based insurer said in a statement. The funds were raised internally, Chief Executive Officer Alex Wynaendts said.

Aegon, the recipient of 3 billion euros of state aid in 2008, was banned from making acquisitions and paying dividends as conditions for the EU approving the bailout. The firm repaid half the money before this year, and settled another 750 million euros in March after raising 903 million euros in a share sale.

“It is a good sign that the Dutch Central Bank approved the final repayment, stressing Aegon’s healthy capital position,” Maarten Altena and Albert Ploegh, analysts at ING Groep NV in Amsterdam, said in a note. “Aegon is now able to fully focus on delivering to its strategy.”

Aegon gained 1.3 percent to 4.63 euros at 9:38 a.m. in Amsterdam trading, giving the company a value of about 8.7 billion euros.

Aegon plans to resume paying a dividend in May 2012 and aims to return 10 cents a share to shareholders over the second half of 2011. The company’s goal is for a “sustainable dividend, growing with the business and capital,” Wynaendts reiterated today, adding it is too early to discuss share buybacks.

‘Significant Milestone’

“This is a significant milestone,” he said on a conference call. “This allows us to leave the financial crisis behind us.”

Wynaendts, who aims to grow Aegon’s businesses in central and eastern Europe, Spain, Latin America and Asia, said the firm’s priority isn’t on acquisitions.

“Now obviously we’ll have flexibility but our main priority remains organic growth,” he said.

The Dutch state’s return on its 3 billion-euro investment was 18.5 percent, according to a finance ministry statement.

The insurer earlier this year agreed to sell most of its global reinsurance business Transamerica Reinsurance to Scor SE in a deal with a post-tax value of $1.4 billion. The insurer expects to complete the transaction in the summer and said the process is “on track.”

--With assistance from Martijn van der Starre in Amsterdam. Editors: Dylan Griffiths, Frank Connelly.

To contact the reporter on this story: Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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