EC probes Hungary veto of VIG-Aegon transaction

EU

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The European Commission said it opened an investigation into a possible violation of the European Union's merger regulation with regard to the Hungarian Interior Ministry's veto of the acquisition of the local business of Dutch insurer Aegon by Austrian peer Vienna Insurance Group (VIG), according to a report by state news wire MTI.

VIG said in April that 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.

On Friday, the EC said it has "sole jurisdiction to examine concentrations with a Union dimension" under Article 21 of the EU merger regulation.

Member states "shall not apply their national laws to such concentrations but can only take appropriate measures to protect their legitimate interests, subject to them being compatible with EU law", the EC said, adding that "any measures other than those genuinely protecting public interest, plurality of the media and prudential rules have to be communicated to the commission for assessment prior to being implemented".

"The Hungarian government did not communicate the measure to the commission prior to its implementation nor has it to date provided an adequate explanation of the reasons underpinning this veto in the insurance sector," the EC said, explaining the launch of the probe.

VIG announced a year earlier that it agreed to acquire the businesses of Dutch peer Aegon in Hungary, Poland, Romania and Turkey for a price of EUR 830 million. VIG was expected to take over Aegon's general and life insurance companies as well as pension funds, asset management, and service companies in the countries. The acquisition would make VIG market leader in Hungary.

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