Aegon to buy Merrill Lynch life cos for 1.3 bln usd; form strategic venture

Aegon to buy Merrill Lynch life cos for 1.3 bln usd; form strategic venture

	Published : Tue, 14 Aug 2007 06:05 By : Agencies Print this Story

AMSTERDAM (Thomson Financial) - Aegon NV said it agreed to buy Merrill Lynch life insurance companies for 1.3 bln usd as it announced it had also entered into a strategic relationship with Merrill Lynch in the areas of insurance and investment products.

Aegon will buy Merrill Lynch Life Insurance Company and ML Life Insurance Company of New York for 1.3 bln in cash, with the purchase price inclusive excess surplus of about 425 mln usd.

Aegon said the deal is expected to close before the end of the fourth quarter, subject to customary regulatory approvals and closing conditions.

Merrill Lynch will continue to serve the insurance needs of its clients through its distribution and advisory capabilities.

It will continue to offer its flagship Merrill Lynch Investor Choice Annuity product through its financial advisor network.

Aegon's Transamerica companies will provide support to the Merrill Lynch financial advisor network.

With about 800 mln usd of variable annuity sales in 2006 and about 10 bln of variable annuity assets at the end of 2006, Aegon said the acquisition of the two companies will place it firmly in the top ten of variable annuities sellers in the wirehouse and broker/dealer segment globally.

Aegon expects the acquisition to have a marginally positive effect on earnings per share.

It will finance the transaction using existing excess capital and said the acquisition will not impact its ability to execute the 1 bln share buyback scheme announced at the presentation of its second quarter results last week.

Merrill Lynch expects to record a significant gain on the sale during the fourth quarter and anticipates the deal will be slightly accretive to EPS and to have a positive effect on return on equity in 2008 after redeployment of proceeds.

Aaron Gray-Block; aaron.gray-block@thomson.com

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