ING Plans to Sell All Insurance Units Together, Kliphuis Says
March 5, 2010 by Krystof Chamonikolas and Martijn van der Starre
By Krystof Chamonikolas and Martijn van der Starre
March 5 (Bloomberg) — ING Groep NV, the biggest Dutch financial-services company, plans to sell all of its insurance businesses together in an initial public offering, the head of the central European insurance division said.
ING will “prepare for an initial public offering of the global insurance business, most likely somewhere at the end of 2011,” although the company is still evaluating its options, ING Insurance Central Europe Chief Executive Officer Tom Kliphuis said in an interview in Prague today. “There is absolutely no intention whatsoever to somehow carve out central Europe from the rest.”
The Dutch company agreed to sell 16 billion euros ($22 billion) of insurance businesses and its U.S. online-banking unit as a condition for winning the European Union’s approval for receiving state aid during the global financial crisis. It aims to separate the banking and insurance operations by the end of the year.
Amsterdam-based ING has insurance and pension-management businesses in countries including Poland, Romania, the Czech Republic, Turkey, Spain and Hungary. European insurance sales remained “under pressure” in the fourth quarter, especially in central Europe, amid the economic slump, ING said last month.
The possible IPO “depends on the market circumstances, but the most likely scenario would be that you do it in steps,” said Kliphuis, who’s headed the ING unit since 2006. “It might also be two IPOs.”
Preparing an IPO
ING Chief Executive Officer Jan Hommen said at the end of last year that the company was preparing one or two IPOs for the insurance assets.
The Dutch firm plans to move 30 percent of central Europe’s back-office operations to Romania to cut costs, Kliphuis said. “You would never do that if you were to prepare for individual sales,” Kliphuis said. “It’s a very strong signal that we are absolutely committed to keep everything together.”
Central and eastern Europe has a lot of growth potential as the penetration of life insurance and pensions is “very, very low” compared with western Europe, Kliphuis said. The region is “catching up very, very fast,” he added.
To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net; Martijn van der Starre in Amsterdam at vanderstarre@bloomberg.net
