Aegon to divest stake in partnership with Sony Life in Japan
Aegon announces an agreement to sell its 50% stake in the variable annuity joint ventures in Japan for total cash proceeds of approximately EUR 130 million (JPY 16 billion) to its partner Sony Life.
"With the evolving market conditions, we mutually agreed that the future of the variable annuity business in Japan is best served as a wholly-owned part of our longstanding partner Sony Life", said Alex Wynaendts, CEO of Aegon. "I am confident that this change is in the best interest of all stakeholders. This divestment allows Aegon to fully focus on its most promising businesses in Asia serving the fastest growing customer segments and offering the most significant opportunities."
The divestment is consistent with the company's strategy to focus on driving profitable sales growth and sustainably growing capital generation. The divestment will not have a material impact on Aegon's capital position and is expected to lead to an IFRS gain of approximately EUR 50 million, to be reported in "Other income" at time of closing. Upon completion of the transaction, the cash proceeds will be upstreamed to the group.
The details of the divestment are currently being finalized and will be subject to normal regulatory approvals for transactions of this nature. This is likely to be completed by the end of 2019. To facilitate the transition, Aegon will continue to support the operations with certain hedging, consulting and administrative activities during a transition period. An update will be provided once the full transaction agreements are signed.
Aegon will remain focused and committed to the fast-growing customer segments in Asia. Core products in the region include universal life insurance and protection products. Universal life insurance products are primarily offered through the High Net Worth segment via Transamerica Life Bermuda, which continues to expand geographically. Protection products are sold via direct-to-consumer channels and digital distribution platforms in the joint ventures, such as in China, where Aegon is committed to a protection led strategy focused on critical illness and whole life products enabling the joint venture to grow sales in the last five years. Aegon also invests in digital distribution platforms in other Asian markets to expand distribution capabilities. Furthermore, the successful Chinese asset manager joint venture, Aegon Industrial Fund Management Company, is a cornerstone of the growth strategy of Aegon Asset Management.
Update June 28, 2019
Aegon and Sony Life have signed the transaction agreements related to the divestment of Aegon's 50% stake in the variable annuity joint ventures in Japan.