ING to End Majority Stake in U.S. Business in $1.2 Billion Sale

ING Groep NV (INGA), the biggest Dutch financial-services company, will end its majority stake in a U.S. insurance unit with another share sale as it winds down ownership of the business.

The parent plans to sell 26.5 million shares of ING U.S. Inc. in a public offering and another 7 million directly to the New York-based company, ING Groep said in a statement. The 33.5 million shares are valued at about $1.2 billion, based on yesterday’s closing price.

ING Groep is exiting its U.S. life business to comply with terms of a 2008 bailout. The sales outlined yesterday would cut the stake to 45 percent from 57 percent. The Dutch company divested shares in an initial offering in May for $19.50 apiece and had another sale in October.

“That was a great investment call” by the parent company to spread the sales over several offerings, Cor Kluis, an analyst at Rabobank International in the Dutch city of Utrecht, said before the announcement. “They’ve created a lot of value in almost a year which they can use to pay back debt.”

Morgan Stanley and Goldman Sachs Group Inc. are among the banks leading the offering, according to a regulatory filing. ING U.S. advanced 2 percent to $36.30 yesterday in New York.

Photographer: Matthew Lloyd/Bloomberg

ING Groep NV is exiting its U.S. life insurance business to comply with terms of a 2008 bailout. Close

ING Groep NV is exiting its U.S. life insurance business to comply with terms of a 2008 bailout.

Close
Open
Photographer: Matthew Lloyd/Bloomberg

ING Groep NV is exiting its U.S. life insurance business to comply with terms of a 2008 bailout.

Erroneous Filing

The document clarifies the Dutch parent’s intentions after the company posted a filing with the U.S. Securities and Exchange Commission earlier with a plan to sell “approximately 33 million” shares. ING Groep then said that the initial document was filed “prematurely and erroneously.”

To comply with European Union demands attached to its rescue, ING Groep has been selling operations, including its U.S. online bank and insurance assets from Latin America to Asia. ING gained 0.8 percent yesterday in Amsterdam.

The parent company said it would use sale proceeds to reduce debt. ING Groep will record a loss of about 2 billion euros ($2.8 billion) in its first-quarter results, reflecting the difference between the sale price and book value of ING U.S. shares.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Maud van Gaal in Amsterdam at mvangaal@bloomberg.net

To contact the editors responsible for this story: Dan Kraut at dkraut2@bloomberg.net Dan Reichl

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.