Hungary closes acquisition of 45% stake in VIG-Aegon tie-up

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The state of Hungary has closed the acquisition of a 45% stake in the local businesses of Vienna Insurance Group (VIG), the Finance Ministry said on Friday, according to a report by state news wire MTI.

The ministry noted that Finance Minister Mihály Varga had signed a contract with representatives of VIG on the acquisition of 45% stakes in Aegon Biztosító and Union Biztosító on February 21.

"The investment is extraordinarily advantageous for Hungary: the combined share of the two insurers is close to 20% of the domestic market and their revenue from premiums is HUF 240 billion a year, making the two companies market leaders in the sector," the ministry said.

VIG said earlier the purchase price for the acquisition was about EUR 350 mln.

VIG announced on Wednesday that it closed the acquisition of the local business of its Dutch peer Aegon after the transaction was approved by Hungarian authorities.

Preliminary data show Aegon Biztosító's revenue from premiums came to EUR 401 mln and it had pre-tax profit of EUR 51 mln in 2021, VIG said. The business has more than 1.5 mln policyholders.

VIG announced in November 2020 that it agreed to acquire the businesses of Aegon in Hungary, Poland, Romania, and Turkey for a price of EUR 830 mln. In April 2021, VIG said its acquisition of Aegon's business in Hungary was denied by the Interior Ministry.

Under state-of-emergency powers vested by parliament, Hungary's government has been equipped with legal tools to block foreign takeovers of domestic companies.

In January 2022, the European Commission said it "preliminarily concluded" that Hungary violated the European Union's merger regulation when Hungarian authorities vetoed the acquisition of the local business of Aegon by VIG. On February 21 - the same day the state of Hungary signed the contract to acquire the stakes in the insurers - the EC said Hungary had breached an article of the EU merger regulation that confers upon the EC "exclusive competence for concentrations having Union dimension".

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