Spanish savings bank Caja de Ahorros y Monte de Piedad de Navarra and Aegon have signed a partnership agreement whereby Aegon will acquire a 50% stake in Caja Navarra's life insurance and pensions subsidiary, Seguros Navarra S.A.
The acquisition will take place in two tranches; initially Aegon will acquire a 15% stake with another 35% expected to be acquired in the first quarter of 2006. The acquisition is subject to approval by the Spanish and European regulatory authorities.
Both companies will further develop the existing bancassurance business and distribution capabilities of Seguros Navarra. Caja Navarra will provide exclusive access to its network of 266 branches to Seguros Navarra to sell life insurance and pension products. Aegon will contribute its broad base insurance expertise. As a result of the partnership, Seguros Navarra will significantly expand its life and savings product offering, completing its current recurring and single premium and savings products as well as its pension plans.
Aegon will pay Caja Navarra a total initial consideration of EUR 60 million for the acquisition of 50% of the shares of Seguros Navarra. In year five, Caja Navarra is entitled to receive a further payment, which will be based on the realization of a jointly agreed business plan, and according to a pre-agreed formula.
The transaction is in line with Aegon's strategy to further strengthen its bancassurance distribution capabilities in the expanding Spanish life insurance and pension markets.
In addition, the partners have entered into an agreement to explore investment opportunities in health care activities, related to the health and life insurance business in Spain.
Enrique Goñi, General Manager of Caja de Ahorros y Monte de Piedad de Navarra said: "The partnership with Aegon will accelerate our life and pensions business, allowing us to better compete."
“Aegon is proud to join with Caja Navarra in providing life and pensions solutions to their extensive customer base,” said Donald J. Shepard, Chief Executive Officer and Chairman of the Executive Board of Aegon N.V. “We are confident that together we will build a leading position in the growing Spanish life and pensions market.”
About Caja Navarra The savings bank Caja Navarra has a network of 266 branches, which are concentrated in the Navarra region; it expects to reach 350 branches in 2007, 150 of which will be outside the region of Navarra. Caja Navarra, which is headquartered in Pamplona, offers a wide range of products to its retail and corporate clients. At the end of 2004, Caja Navarra employed 1,335 people. Its total assets amounted to EUR 9,340 million. Net earnings of Caja Navarra were EUR 84.6 million in 2004. Seguros Navarra was incorporated in 1988. In 2004, total life premiums of Seguros Navarra were EUR 151 million. Its pension plans assets amounted to EUR 647 million. For more information, visit the company’s website at www.cajanavarra.es.