Vienna Insurance Group (VIG) has reached an agreement with the Hungarian government on the principles of a cooperation and the further course of action regarding insurers Aegon and Union Vienna Insurance Group Biztosító Zrt.
Back in September, VIG’s proposed acquisition of Aegon’s businesses in Central and Eastern Europe was blocked by Hungarian authorities.
The agreement was cleared by the European Commission in August, but faced disruption from an earlier move by the Hungarian Ministry of Interior to prohibit the takeover of Aegon’s business in the country by a foreign company.
The new agreement between VIG and the Hungarian gov provides for a 45% participation by the Hungarian state in the two local companies.
The structure of the arrangement, which is subject to further negotiations, entails the controlling stake of and the operational management by VIG.
With talks ongoing, the Hungarian government has nominated Corvinus Nemzetközi Befektetési Zrt., a 100% state-owned holding company, as negotiating partner.
VIG has welcomed the future cooperation with Hungary, and the signing of a Memorandum of Understanding (MoU) is scheduled for today.
“As a next step, VIG and Hungary will negotiate the participation and governance structure, will obtain the necessary board resolutions, and will apply for the approvals that are necessary for the implementation of the transaction,” says VIG.
In light of this announcement, Aegon has said that it will continue to work with VIG to close their proposed transaction, which sees VIG acquire Aegon’s insurance, pension, and asset management businesses in Hungary, Poland, Romania, and Turkey for €830 million.