Vienna Insurance Shares Stake in Hungary Unit to Save Aegon Deal
Vienna Insurance Shares Stake in Hungary Unit to Save Aegon Deal
(Bloomberg) -- Vienna Insurance Group AG agreed to share ownership of its Hungarian operations with a state investment fund after months of negotiations, in order to salvage an 830 million-euro ($941 million) deal to buy regional assets from Aegon NV.
The insurer will allow state-owned Corvinus Nemzetkozi Befektetesi Zrt. to buy a 45% stake in both VIG’s existing Hungarian subsidiary and the local Aegon units, according to the resolution announced late Wednesday. The Austrian parent company will keep a controlling interest and management rights.
The deal is the latest example of Hungary’s leadership applying regulatory pressure to expand the government’s influence in the economy. VIG’s agreement to buy Aegon’s operations in eastern Europe and Turkey, signed in November 2020, has been held up after Hungary’s interior ministry blocked the acquisition of assets in the country, citing a law on national business interests.
Corvinus has held a 15% stake in Erste Group Bank AG’s local unit since 2015 as part of a pact to cut Hungary’s bank tax at the time.
The deal may reinforce VIG’s position as one of the largest insurers in eastern Europe. It’s already market leader in the Czech Republic, Slovakia, Romania and Bulgaria, as well as its home in Austria.
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