AEGON is to sell its UK-based Guardian life and pension business for a total cash consideration of GBP275 million to Cinven, a European private equity group.
Guardian, which manages over 300,000 life insurance policies in the United Kingdom, has been closed to acquiring new business since 2001.
AEGON Asset Management has entered into a long-term agreement with Cinven and will continue to manage the assets of Guardian which total GBP 7.4 billion.
"Consistent with actions over the past three years to dispose of, or run-off, certain businesses deemed non-core, AEGON has concluded that managing the closed business of Guardian companies no longer fits with our strategic objectives," says Jan Nooitgedagt, AEGON’s CFO. "We remain committed to the United Kingdom and to maximising the opportunities of AEGON’s chosen markets, Workplace Savings and At Retirement, which includes individual protection."
The book value of the Guardian business amounted to GBP 271 million as per June 30, 2011, while the embedded value amounted to GBP 322 million. Underlying earnings before tax totalled GBP 23 million in 2010.
Guardian, based in Lytham, England, employs approximately 170 people, and for most, their employment arrangements will be transferred to the buyer upon completion of the sale of the business.
The transaction, which is subject to regulatory approval, is expected to close in the fourth quarter of 2011.