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The Hague, March 23, 2022 - Aegon announces today that it has completed the divestment of its Hungarian businesses to Vienna Insurance Group AG Wiener Versicherung Gruppe (VIG). The gross proceeds of the transaction amount to EUR 620 million. This completion is an important step towards the full closing of the sale of Aegon’s insurance, pension, and asset management businesses in Central and Eastern Europe to VIG for EUR 830 million, as announced in November 2020. The sales of Aegon’s businesses in Poland, Romania and Turkey are expected to be completed in the course of 2022, subject to required local regulatory approvals.
“Today’s announcement marks an important step in the transformation of Aegon as we narrow our strategic focus to select core and growth markets, and further strengthen our balance sheet”, said Lard Friese, CEO Aegon. “I would like to sincerely thank our employees in Hungary for their significant contribution to Aegon over the years.”
The closing of the sale of the Hungarian businesses will result in a significant increase of Aegon’s Cash Capital at the Holding – which amounted to EUR 1.3 billion at the end of 2021 – and brings it above the stated operating range of EUR 0.5 billion to EUR 1.5 billion. This provides Aegon with the financial flexibility to announce today a reduction of its debt through a EUR 375 million tender offer, as well as the intention to return surplus cash capital to its shareholders via a EUR 300 million share buyback, barring unforeseen circumstances. These actions are in line with the ambitions stated at the Capital Markets Day in December 2020.
“I am very pleased that by further reducing our debt, we are able to deliver on our deleveraging goal well ahead of our 2023 target date”, Lard Friese added. “Today’s announced share buyback also underscores our intention to return surplus cash capital to shareholders.”
Debt tender offer and share buybackThe debt repayment will be executed through a EUR 375 million tender offer for six subordinated bonds. Details of the debt tender offer will be disclosed via a separate press release today. After completion of the tender offer, Aegon will have reduced its gross financial leverage to the range of EUR 5.0 billion to EUR 5.5 billion, a target that was set to be accomplished by 2023.
Additionally, Aegon intends to return EUR 300 million of surplus cash capital to shareholders via a share buyback in the course of 2022. The share buyback will be executed in three tranches of EUR 100 million each, with each tranche conditional on maintaining the capital positions of Aegon's main units in line with its stated ambitions, and the Cash Capital at the Holding being above the middle of the operating range.
The EUR 300 million share buyback program will commence on April 1, 2022 and is expected to be completed on or before December 15, 2022. The first tranche of EUR 100 million is expected to be completed on or before June 30, 2022. For each tranche Aegon will engage a third party to execute the buyback transactions on its behalf. The common shares will be repurchased at a maximum of the average of the daily volume-weighted average prices during the repurchase period, and will subsequently be proposed to be cancelled at Aegon’s 2023 Annual General Meeting of Shareholders.
Following the divestment of Aegon’s businesses in Hungary, Aegon’s IFRS equity will increase by approximately EUR 400 million in the first quarter of 2022, of which approximately EUR 375 million will be recognized as a book gain, based on the balance sheet position on December 31, 2021. The combination of the completion of the sale of Aegon’s Hungarian businesses, the repayment of the debt and the share buyback will not have a material impact on the Group Solvency II ratio.
About Aegon
Aegon is an integrated, diversified, international financial services group. The company offers investment, protection, and retirement solutions, with a strategic focus on three core markets (the United States, the United Kingdom, and the Netherlands), three growth markets (Spain & Portugal, Brazil, and China), and one global asset manager. Aegon's purpose of Helping people live their best lives runs through all its activities. As a leading global investor and employer, the company seeks to have a positive impact by addressing critical environmental and societal issues, with a focus on climate change and inclusion & diversity. Aegon is headquartered in The Hague, the Netherlands, and listed on Euronext Amsterdam and the New York Stock Exchange. More information can be found at aegon.com.
Contacts | |
Media relations | Investor relations |
Dick Schiethart | Jan Willem Weidema |
+31(0) 70 344 8821 | +31(0) 70 344 8028 |
dick.schiethart@aegon.com | janwillem.weidema@aegon.com |
Forward-looking statements
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 may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. In addition, any statements that refer to sustainability, environmental and social targets, commitments, goals, efforts and expectations and other events or circumstances that are partially dependent on future events are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Aegon undertakes no obligation, and expressly disclaims any duty, 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 and adversely 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:
This document contains information that qualifies, or may qualify, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation (596/2014). 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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