Aegon acquires Mercer’s US defined contribution record-keeping business

Deal strengthens Transamerica’s retirement platform and adds USD 71 billion in assets under administration.

Aegon, through an affiliate of its Transamerica unit, has reached an agreement with Mercer HR Services, LLC to acquire Mercer's US defined contribution administration book of business.

Upon completion of the acquisition, the defined contribution business will transition to Transamerica Retirement Solutions, which will become a top ten defined contribution record-keeper based on plan participants and assets.

Transamerica to become a top-ten defined contribution record-keeper based on plan participants and plan assets.

Mercer is widely recognized for its best-in-class solutions in the large corporate benefits administration market. As such, the transaction complements Transamerica's current retirement services offering, which has experienced success and growth in the large and mega markets with a primary focus in the not-for-profit segment.

"This agreement with Mercer further strengthens Transamerica's leading position in the US retirement sector, with the know-how and broad capability to serve every retirement plan market segment," said Mark Mullin, a member of Aegon's Management Board and President & CEO of Transamerica.

Expand fee-based retirement solutions

"This latest strategic development supports our aim to further grow and diversify our customer base, while continuing to expand our offering of fee-based retirement solutions."

As a result of the acquisition, the number of retirement plan participants serviced by Transamerica will increase by 917,000 to approximately 5 million. Assets under administration (AUA) will increase by USD 71 billion to approximately USD 216 billion (as of August 31, 2015).

In addition, Transamerica will become the preferred defined contribution record-keeping provider for Mercer's total benefit outsourcing and total retirement outsourcing clients going forward.

Strategic fit

The added scale in participants and AUA, coupled with new business opportunities and additional expertise in the large and mega corporate market segment, collectively demonstrate the strategic fit of this acquisition for Transamerica.

Additionally, this transaction provides Transamerica the opportunity to further serve the growing market for seamless Individual Retirement Account roll-over products and retirement counseling services.

The transaction is expected to close in the fourth quarter of 2015, subject to regulatory approval, and is not expected to have a material positive effect on Aegon's earnings in 2016.