Sul America and ING Strengthen Partnership in Brazil
PRNewswire-FirstCall
AMSTERDAM and RIO DE JANEIRO, Brazil
Mar 26, 2002
Sul America S.A. and ING announced today an agreement to strengthen their partnership and broaden their products and services to customers across Brazil. As a result of the agreement, ING will own 49 percent of Sul America, while the remaining ownership will continue in the hands of the former shareholders.
ING will participate in all insurance areas covered by Sul America. In addition, ING's and Sul America's asset management businesses will be merged.
The initial partnership was formed in 1997 when Aetna acquired a 49 percent stake in Sul America Aetna Seguro Saude S.A. ("Sulaet"), a health, life, personal accident and pension joint venture with Sul America. In 2000, ING and Sul America became partners after ING's acquisition of Aetna International.
While the implied value of the transaction will not be disclosed, ING's total investment in Sul America will consist of:
* Approximately US$160 million in cash. * Its 49 percent stake in Sulaet. * Its asset management operations (ING Investment Management Brazil).
The agreement, pending regulatory approvals, covers both companies' insurance, asset management, life and pension businesses in Brazil. The agreement gives Sul America a strategic partner with access to the best international insurance and financial services practices, and it provides ING with a competitive advantage in Brazil by expanding its association with one of the country's leading insurance groups.
"Both Sul America and ING firmly believe that the expansion of this partnership stems from the ever-growing potential of the Brazilian economy and the opportunities foreseen in this market," said Patrick de Larragoiti Lucas, Chairman and CEO of Sul America. "The strong bond that exists between our two companies has already been tested in our previous alliance in the health, life and pension businesses. The merger of the international financial and local market expertise of both partners enhances the quality of services and products offered to our Brazilian customers and brokers. The merger of both asset management divisions will strengthen this business."
Sul America is one of Brazil's largest insurance companies and one of the premier financial services brand names. Amsterdam-based ING Group is one of the world's largest financial services organizations.
"Sul America is already an outstanding partner for ING because of its strong management, talented employees, diverse product lines, broad distribution, large market share and brand recognition in the huge Brazilian marketplace," said Glenn Hilliard, Chairman and CEO of ING Americas. "Similar to ING's strategy for all of our Latin American countries, there is a significant opportunity in Brazil to establish our joint venture as an industry leader in the wealth management business. At the same time, we will continue to grow a strong position in our risk management business. Clearly this is another great step for both companies in this partnership."
The new partnership will enable the group to offer highly differentiated, innovative products and services to customers throughout Brazil. ING and Sul America will have access to each others' technical, marketing and financial resources, and they expect to extract significant synergies, thus ensuring profitable growth.
The combined asset management business will include the asset management operations of Sul America Investimentos (Moody's rating: MQ2) and ING Investment Management (Standard & Poors rating: MP2). The merged entity will have total assets under management of R$5.4 billion (US$2.3 billion) and will be an important step in the development of the wealth management business, a key business line for the partnership going forward. Corporate governance, risk management, investment policy and business practices will be aligned to ensure continued first-class service to clients and customers.
Sul America
Founded in 1895, Sul America is one of the leading companies in the Brazilian insurance market and one of the largest insurance groups in Latin America. Its brand name is among the most highly regarded within the Brazilian financial services industry. Operating throughout Brazil through several companies, Sul America employs over 7,000 people and sells a full range of insurance products as well as providing pension and asset management services, managing assets worth around R$3.7 billion (US$1.6 billion). The company has a long-standing alliance with a vast network of over 26,000 insurance brokers, and for selected business lines has established alliances with important groups such as Banco do Brasil and the German group Gerling Konzern.
In 2001, Sul America Group reported total premiums of R$4.9 billion (US$2.1 billion), equivalent to 19.3 percent of the Brazilian insurance market. In the same year, the company had 6.2 million policyholders. Sul America has been one of the leading insurance companies in Brazil over the last 10 years. It is the largest health insurance company in Brazil with a 45 percent market share; the largest motor vehicle insurer with a 15.6 percent market share; and has approximately 10 percent of the industrial and commercial risks market. It is also the fourth largest life and personal accident insurer with a 7.3 percent market share.
ING
ING Group (NYSE: ING) reported that operational net profit rose 6.1 percent to US$3.8 billion in 2001. Operational net profit per share rose 5.3 percent over 2000 to US$1.95. Assets under management grew 2 percent to US$454.3 billion, including a net inflow of US$36 billion.
ING Americas, which is part of ING Group, comprises integrated financial services operations in North America and Latin America with business operations in the U.S., Canada, Mexico, Argentina, Brazil, Chile and Peru. ING Americas offers a comprehensive array of products and services, including life, health and property & casualty insurance; fixed and variable annuities; reinsurance; guaranteed investment contracts and other institutional investment advisory services; retirement plans; employee benefits; and mutual funds. To date, ING Americas and its affiliates have US$169 billion in assets under management and more than 40 million customers. ING has been present in Brazil since 1983 providing wholesale banking services to corporate clients, including treasury, corporate banking and advisory. ING Investment Management has been active in Brazil since 1998, focusing on institutional and corporate clients, and has total assets under management of R$1.7 billion (US$740 million).
For ING AMERICAS Media contacts In Atlanta: Dianne Bernez, 770-618-3910 In Brazil: Gustavo Bernhoeft, Edelman, (11) 3017-5304 For SUL AMERICA SEGUROS Media contact: Patricia Gonzalez/Leticia Werneck/Monica Pereira, FSB Comunicacoes, (21) 2506-8242/8504/9286 E-mail: imprensa@sulamerica.com.br
SOURCE: ING Americas
Contact: Atlanta, Dianne Bernez of ING Americas, +1-770-618-3910; or
Brazil, Gustavo Bernhoeft of Edelman, 11 3017-5304, for ING Americas; or
Patricia Gonzalez, 21 2506-8242, Leticia Werneck, 21 2506-8504, or Monica
Pereira, 21 2506-9286, or imprensa@sulamerica.com.br , all of FSB Comunicacoes
for Sul America Seguros
Website: http://www.ing-usa.com/