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NN Group to acquire Delta Lloyd in EUR2.5bn merger deal

IBR Staff Writer Published 28 December 2016

Dutch insurer NN Group has agreed to acquire Delta Lloyd for €2.5bn in an all cash deal to form a combined insurance and asset management firm in The Netherlands.

NN Group has offered to buy each of the Dutch insurance company Delta Lloyd share at €5.40.

Through the merger, the two companies expect the combination of Delta Lloyd and the NN Group’s Dutch and Belgian operations to be compelling and resulting in a stronger platform in the Benelux region.

Besides it is also expected to deliver improved customer propositions and returns for shareholders.

NN Group CEO Lard Friese said: “Customers of both companies will benefit from an enhanced proposition by complementing our product offering and distribution. Consolidation in the insurance sector will bring additional stability in our markets, and will generate a materially higher cash return to our shareholders over time, through the benefits of scale.

“We strongly believe this transaction to be in the best interest of both companies’ stakeholders, and I am pleased the transaction has the support and recommendation of the Delta Lloyd Boards.”

The non-life insurance business following the merger is likely to double, resulting in driving underwriting results and customer experience.

In Belgium, the integration is likely to double the combined business’ presence resulting in a strong life insurance market share alongside a diversified offering from additional channels, said the companies.

Delta Lloyd CEO Hans van der Noordaa said: “After extensive analysis of different alternatives, we made a clear decision that a combination of NN Group and Delta Lloyd is in the long term interest of our stakeholders including our shareholders. The offer provides a certain cash premium for shareholders and also a secure future for policyholders.”

NN Group will finance the transaction through its existing cash resources combined with debt.

The transaction, subject to various conditions and approvals including a vote in favour of the merger from NN Group, is expected to be closed in the second quarter of 2017.

Image: Delta Lloyd location in Amsterdam across the Amstel. Photo: courtesy of Rokus C and Commons.wikimedia.org.