Hungarian authorities block VIG’s acquisition of Aegon entities in Hungary

The sale of Aegon’s insurance, pension and asset management businesses in Hungary, Poland, Romania and Turkey to Vienna Insurance Group (VIG) has stalled after the Hungarian authorities blocked the acquisition. Aegon had agreed the sale to VIG for €830m. However, VIG said it had received a decree in which the Hungarian Ministry of the Interior announced that the intended acquisition by a foreign investor of the Aegon companies in Hungary is denied. VIG said: “As part of the approval process, VIG has been in constructive talks with the responsible Hungarian minister of finance since January 2021. The decree is in contradiction with the course of the talks to date. Vienna Insurance Group expects that this issue will be resolved positively in the near future.” VIG CEO Elisabeth Stadler said: “Our ties to Hungary have grown historically and have always been characterised by mutual appreciation. For a quarter of a century, we have been successfully investing in the Hungarian economy. Therefore, we were surprised by the announcement from the Hungarian authorities. “By assuming and insuring risks of daily life and through long-term investments, we are making a valuable contribution to the national economy, thus contributing to social security and securing jobs.” VIG said it had started the usual talks and approval procedures with the local authorities, and in Hungary, constructive talks with the Minister of Finance were initiated swiftly after the deal was announced. “All the more surprisingly, on 6 April 2021 in the afternoon, VIG was informed by the Hungarian Ministry of Interior that it would be denied approval for the acquisition of the Hungarian Aegon companies to a foreign investor,” said VIG. The insurer noted that it has been present in Hungary since 1996. “In all our markets, we are known as a long-term and reliable partner. We know our markets very well due to our long-term strategy. This is especially true for Hungary; we see this country as our home market. We feel a special bond with our neighbour not only because of our common past. We also do not see ourselves as a foreign investor but, based on our local multi-brand strategy and our principle of local entrepreneurship and local management, as a supporter and co-developer of the Hungarian insurance market,” said Ms Stadler. “We are therefore very interested in a further long-term partnership with Hungary for the benefit of both parties.” VIG said it plans to continue operating the companies to be acquired in Hungary under a new name, in accordance with its local multi-brand strategy. Aegon said it will continue to work with VIG to close the transaction. The deal had been expected to close in the second half of 2021. Aegon said at the time of the deal that “the proceeds will be upstreamed to the group and increase Aegon's financial flexibility to execute on its strategic priorities, including deleveraging”. Lard Friese, CEO of Aegon, said at the time of the agreement: “This transaction will simplify Aegon’s footprint and strengthen our balance sheet. We are sharpening our strategic focus and concentrating on those countries and business lines where Aegon can create most value. I would like to thank our employees in Hungary, Poland, Romania and Turkey for their significant contribution to Aegon over the years. We believe that our businesses will benefit greatly from the vast experience of VIG, a leading insurance group in the region.”

Hungarian authorities block VIG’s acquisition of Aegon entities in Hungary

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