ASR Attracts Non-European Investors for Reaal BidMaud van Gaal
ASR Nederland NV, the Dutch state-owned insurer, started talks with about 20 investors to sell a stake to help finance a possible bid for Reaal NV, Chief Financial Officer Chris Figee said.
“There are parties from the U.S. and other regions outside Europe who are also taking a serious look,” Figee said in an interview in Utrecht. Less than five investors will be shortlisted to purchase the stake in ASR to enable it to make an offer for Reaal in the coming months, he said.
The potential sale of Reaal, an insurer which is also government-owned, follows the 1.54 billion euros ($2.1 billion) that ING Groep NV raised from the sale of shares in its insurer NN Group NV on July 2. Regulators have stressed a need for consolidation in the Dutch life insurance industry, among Europe’s biggest with 383 billion euros in assets and about 40 providers in the first quarter. Premium income fell every year since 2008 as insurers lost market share to banks.
CVC Capital Partners Ltd. is among those considering investing in ASR, two people with knowledge of the matter said last month.
“The success of the NN IPO is good for the industry in general and also for us -- it’s good to see proof that capital is available for the insurance industry,” Figee, 42, said.
Figee said investors are being drawn by the prospect of cost-cutting that may result should ASR buy Reaal, and of a future rise in interest rates that would increase the value of insurance companies.
The Netherlands said last month it will take a first step toward consolidation of the industry and start an auction for the Reaal, the insurance arm of bank SNS Reaal NV, which was nationalized last year after real estate losses brought it to the brink of collapse. NL Financial Investments, the government agency managing the state’s stakes, said the sale process can be concluded in December at the earliest.
SNS Reaal has hired ABN Amro Group NV and JPMorgan Chase & Co. to manage the sale of Reaal. ASR is being advised by UBS AG.
ASR will carefully consider whether the benefits of integrating Reaal would outweigh the costs and the price it would have to pay, Figee said.
“Our hypothesis at this point is that it would lead to a positive business case,” he said.
Dutch Finance Minister Jeroen Dijsselbloem said in June that ASR can participate in the auction if it succeeds in attracting funding for a potential offer. The country will decide how to further dispose of ASR itself at a later stage, possibly in an initial public offering, he said.
ASR, tracing its roots to 1720, was nationalized together with the Dutch banking assets of Fortis after the Belgian firm’s collapse in 2008. Unlike the lending arm, the insurer didn’t get any capital aid and it has paid dividends since 2011.