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.
Aegon’s roots go back 175 years – to the first half of the nineteenth century. Since then, Aegon has grown into an international company, with businesses in more than 20 countries in the Americas, Europe and Asia. Today, Aegon is one of the world’s leading financial services organizations, providing life insurance, pensions and asset management. Aegon’s purpose is to help people achieve a lifetime of financial security. More information on aegon.com.
The statements contained in this document that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following are words that identify such forward-looking statements: aim, believe, estimate, target, intend, may, expect, anticipate, predict, project, counting on, plan, continue, want, forecast, goal, should, would, could, is confident, will, and similar expressions as they relate to Aegon. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Aegon undertakes no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following:
- The frequency and severity of defaults by issuers in Aegon’s fixed income investment portfolios;
- The effects of corporate bankruptcies and/or accounting restatements on the financial markets and the resulting decline in the value of equity and debt securities Aegon holds; and
- The effects of declining creditworthiness of certain public sector securities and the resulting decline in the value of government exposure that Aegon holds;
Further details of potential risks and uncertainties affecting Aegon are described in its filings with the Netherlands Authority for the Financial Markets and the US Securities and Exchange Commission, including the Annual Report. These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, Aegon expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Aegon’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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Jan Willem Weidema
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