Aegon N.V. announces the sale of Transamerica Finance Corporation’s (TFC) real estate tax service and flood hazard certification businesses to First American Corporation for a total cash purchase price of USD 400 million.
As part of the transaction, TFC’s real estate tax service subsidiary has distributed assets valued at USD 246 million to TFC. The sale of the two TFC subsidiaries, combined with the asset distribution transaction, results in an after-tax book gain of approximately USD 350 million.
In accordance with Dutch Accounting Principles, the gain will be recognized in the fourth quarter of 2003 and will be added directly to shareholders’ equity and will not be included in net income. The cash proceeds received from First American Corporation will be used to retire outstanding debt. This transaction follows the 4 September 2003 announcement of TFC’s intent to sell its real estate tax services and flood hazard certification subsidiaries to First American Corporation.
Transamerica Real Estate Tax Service Inc. provides services to a number of the nation’s top mortgage lenders. These services include reporting on tax delinquencies and ensure the timely and accurate payment of property taxes. Transamerica Flood Hazard Certification Inc. certifies the location of properties in flood zones to many of the nation’s top mortgage lenders and insurance companies. In 2002 these units contributed EUR 42 million (USD 40 million) to Aegon’s net income before funding costs on the related raised debt.
This transaction follows the 5 August 2003 announcement of the agreement to sell TFC’s commercial finance businesses to GE Commercial Finance for USD 5.4 billion. Pending completion of that sale, TFC’s remaining businesses will primarily consist of maritime container and European trailer leasing.
These transactions are consistent with Aegon’s strategy to focus on its core business of life insurance, pensions and related investment products.
