2ndUPDATE:Aegon To Sell Taiwan Operating To Meifu,Others For EUR65 Million

Aegon NV (AEG) will sell its Taiwan operation to a consortium led by Taiwanese property developer Meifu Property Development Group for EUR65 million, the Dutch insurer said Wednesday.

"Our decision to divest our Taiwanese life business is a result of Aegon's strategic priorities to optimize capital allocation and returns, announced last June," Aegon Chief Executive Alex Wynaendts said in a statement.

"Aegon continues to view Asia as an important growth market. We will focus our attention on further developing Aegon's Asian platform, which we believe offers significant growth and return prospects in the coming years."

A person familiar with the transaction earlier told Dow Jones Newswires the "headline number" of the deal's value will be around NT$3 billion, but the actual amount that Taipei-based Meifu pays will be more than NT$1 billion after "some adjustments." He didn't elaborate.

Aegon said the sale will result in a total negative earnings impact of approximately EUR400 million in the second quarter of 2009, resulting in a charge of approximately EUR300 million to shareholders' equity.

However. the Dutch insurer said it expects the sale of its life insurance operation in Taiwan to positively impact future earnings. In 2008, AegonTaiwan recorded a net loss of EUR103 million. At the end of 2008, Aegon Taiwan's embedded value was approximately EUR70 million.

In recent months, several European insurers have exited Taiwan or scaled down their operations on the island as they seek to reduce their capital burden. Taiwan is one of the world's most saturated insurance markets and insurers are struggling to deliver the high returns promised to policyholders.

The U.K.'s Prudential PLC (PUK) is selling its Taiwan agency distribution operations and agency force to the island's China Life Insurance Co. (2823.TW), and ING Groep NV (ING) sold its Taiwan life-insurance unit to Fubon Financial Holding Co. (2881.TW) in February.

Aegon's Taiwan operation, which has been unprofitable for the past three years, had assets totaling NT$187.2 billion and a net worth of NT$4.8 billion at the end of 2008, said Annie Kao, Aegon's public-relations director in Taiwan.

According to the Aegon statement, Meifu Chairman Tom Peng Cheng-hao is leading the consortium.

Aegon Taiwan will hold a press conference at 0730 GMT.

-By Perris Lee Choon Siong, Dow Jones Newswires; [phone]; [e-mail]