Bloomberg News

ING Said in Talks to Sell Latin America Unit to Saieh Group

July 13, 2011

(Adds countries in the third paragraph.)

July 13 (Bloomberg) -- A group including Chilean entrepreneur Alvaro Saieh and Mexico’s Grupo Bal is in talks to buy ING Groep NV’s Latin American pension business, which may fetch $3 billion or more, said people with knowledge of the matter.

The group also includes Colombia’s Santo Domingo family and J.C. Flowers & Co., the New York-based private-equity firm, said the people, who declined to be identified because the discussions are private. ING has indicated it may decide on the unit sale as soon as today, the people said. While ING was in advanced talks yesterday with the Saieh group, other bidders including MetLife Inc. remained in the process, the people said.

At stake is the fate of the second-largest mandatory pension fund management business in Latin America, including positions in the biggest markets of Mexico and Chile. ING also operates those businesses in Peru, Uruguay and Colombia.

If successful in acquiring the ING division, Saieh’s group plans to sell off the Mexican operations to Grupo Bal, controlled by the Bailleres family, said people with knowledge of the plans. The other investors would jointly own the business in the remaining countries. A representative for Grupo Bal, a holding company with operations including mining and insurance, wasn’t immediately available for comment.

Alvaro Saieh wasn’t available to answer questions, an assistant said by e-mail. He controls Corpbanca, Chile’s sixth- biggest bank, as well as retailer SMU SA and media company Copesa SA. Representatives for J.C. Flowers and Santo Domingo didn’t immediately respond to requests for comment. Peter Stack, a spokesman for MetLife, declined to comment.

Latin America Unit

Victorina de Boer, an ING spokeswoman, said the company continues to examine options for its Latin American insurance business and declined to comment further. The pension business is part of ING’s insurance unit in Latin America.

The assets also attracted an offer from a group including Chile’s Luksic family and Mexico’s Grupo Financiero Banorte SAB, according to a person with knowledge of the matter who said the group is no longer pursuing a deal.

ING, the biggest Dutch financial-services company, is under European Union orders to sell its insurance operations as a condition for approval of state aid received during the financial crisis. ING is considering divesting the U.S., European and Asian businesses in two initial public offerings while it has said it is evaluating options for the Latin American insurance unit.

Cor Kluis, an Utrecht, Netherlands-based analyst at Rabobank International, said ING’s Latin American pension business is probably worth about 1.8 billion euros ($2.5 billion). ING’s minority stake in Brazil’s Sul America SA is worth another 0.8 billion euros, Kluis said in a note dated July 5.

--With reporting from Maud van Gaal in Amsterdam, Eduardo Thomson in Santiago, Jonathan Roeder in Mexico City, and Andrew Frye and Jonathan Keehner in New York. Editors: Elizabeth Wollman, John Lear

To contact the reporters on this story: Zachary Mider in New York at zmider1@bloomberg.net; Serena Saitto in New York at ssaitto@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net


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