Bloomberg News

MetLife Could Pay $3 Billion for ING Unit, Bernstein Says

July 22, 2011

(Updates with MetLife liquidity in the seventh paragraph.)

July 22 (Bloomberg) -- MetLife Inc., the U.S. life insurer considering acquisitions in Latin America, has resources to pay $3 billion in cash for ING Groep NV’s business in the region, said Suneet Kamath, an analyst with Sanford C. Bernstein & Co.

“This deal would be viewed positively,” Kamath said today in a research report. “In our view, an acquisition would be better than buybacks.”

MetLife added to its business outside the U.S. with the purchase of American Life Insurance Co. last year for about $16 billion. Chairman Robert Henrikson said in June that MetLife was “looking at possibilities” in Latin America and that the insurer’s existing business in the region would help it with any acquisition. ING has said it is reviewing options for its insurance assets in Latin America.

MetLife has enough capital to spend $3 billion on an acquisition, lift the dividend and buy back stock, Kamath said.

Christopher Breslin, a spokesman for MetLife, declined to comment on Kamath’s note. Raymond Vermeulen, a spokesman for ING, didn’t return a call for comment outside normal business hours in Amsterdam. Vermeulen said last month that ING was evaluating its options for the business.

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 it received during the financial crisis. The Amsterdam-based firm owns the second- largest mandatory pension fund management business in Latin America, including positions in the biggest markets of Mexico and Chile.

‘Strong Capital Position’

MetLife has a “strong capital position,” Henrikson said on June 1 at an investor meeting arranged by Kamath and Bernstein. The firm, which holds most of its funds in the regulated insurance units, had $3.6 billion of cash and liquid assets at the holding company level, Henrikson said.

MetLife paid cash and securities including common stock for its purchase of Alico from American International Group Inc. in November. The Alico deal expanded MetLife’s presence to more than 60 companies from 17.

The insurer slipped 30 cents, or 0.7 percent, to $41.74 at 4:15 p.m. in New York Stock Exchange composite trading. The company has dropped 6.1 percent this year.

--Editors: Dan Kraut, William Ahearn

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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