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Aegon makes advances in Polish, Romanian pension markets

January 6, 2009

Over the past few years, Central & Eastern Europe has been one of the fastest-growing parts of Aegon’s business. Now, the company is further strengthening its position in two of the region’s key pension markets: Poland and Romania.

The move is in line with Aegon’s broader aim: to target more of the company’s resources at areas that offer stronger returns and higher growth prospects.

In Poland, Aegon recently completed its acquisition of the pension company, PTE Skarbiec Emerytura SA. The acquisition makes Aegon Poland’s sixth biggest pension fund company, with nearly 800,000 members and almost EUR 1.8 billion in assets under management. Gábor Kepecs, Management Board member responsible for Central & Eastern Europe, said the acquisition would “significantly enhance” Aegon’s position in the Polish market.

Aegon struck an initial agreement to buy PTE Skarbiec Emerytura from BRE Bank – one of Poland’s leading financial institutions – back in June 2007. The acquisition had to be made in several stages because of complex regulations in Poland governing the ownership of pension fund companies. Polish authorities gave their approval for the acquisition shortly before Christmas. Aegon paid EUR 117 million for PTE Skarbiec Emerytura, in line with an estimate the company gave in June 2007.

In Romania, meanwhile, Aegon has agreed to buy Banca Transilvania’s 50% shareholding in BT Aegon, the pension business set up by the two companies in 2007. Aegon and Banca Transilvania will remain partners, however, through a new distribution agreement covering both life insurance and pension products.

Banca Transilvania decided to sell its stake in BT Aegon as part of wider efforts to focus on its core banking business. The distribution agreement – expected to be signed in the coming weeks – will allow both Banca Transilvania and Aegon to benefit from further growth in the Romanian life insurance and pension markets in the coming years.

Aegon will pay approximately EUR 11 million for the Banca Transilvania stake, giving it full control over the pension business. 

Over the past few years, Aegon has significantly expanded its operations in Central & Eastern Europe, as rising levels of personal wealth and economic reform drive up pension spending in the region. Aegon now has businesses in six countries – Hungary, Poland, the Czech Republic, Slovakia, Romania and Turkey – with more than two million pension fund members and some EUR 4 billion in assets under management.