Fast-growing Athene Holding Ltd is continuing its expansion into Europe with the acquisition of Dublin-based life insurer Aegon Ireland.
Bermudian-based life reinsurer and annuities provider Athene will carry out the transaction through AGER Bermuda Holdings Ltd, the holding company of the group’s European subsidiaries.
Aegon Ireland provides wealth management and retirement planning products to more than 25,000 customers in Britain and Germany. It had assets of approximately £4.7 billion ($6.1 billion) as of June 30, 2017. The transaction is expected to close by the first quarter of 2018, subject to regulatory approvals.
Athene said consideration for the deal will be approximately 81 per cent of the own funds of Aegon Ireland as of closing.
Solvency II own funds of Aegon Ireland were approximately £200 million ($260 million) as of the end of June.
“The successful capital raise by AGER in April 2017 has laid the foundation for our growth in Europe,” said Deepak Rajan, executive vice-president at AGER. “This transaction is another important step towards our goal of becoming the premier European run-off consolidator and life reinsurance partner.
“We see significant opportunities with Aegon Ireland. This acquisition gives us a strong platform to accumulate Irish annuities, to create a reinsurance hub in Europe, and to provide services to all AGER group companies including our existing German operations.
“A presence in Ireland has been part of our strategy from the beginning and Aegon Ireland is a perfect fit for our growth plans.”
AGER, also based in Bermuda, said it intends to break away from Athene.
“Athene will remain a large minority shareholder in AGER in addition to being a preferred reinsurer for AGER’s spread liabilities,” the company said.
The acquisition news came after Athene posted strong earnings growth in its second-quarter results.
Net income for the quarter was $326 million, compared to $193 million in the same period in 2016.
Operating income was $1.43 per share, comfortably beating the $1.08 estimate of analysts tracked by Yahoo Finance and up from 96 cents per share a year earlier.
“We have delivered another quarter of strong financial performance resulting in further strengthening of our balance sheet and capital position,” said Jim Belardi, Athene’s chief executive officer.
“Our differentiated, multichannel distribution platform generated record deposits of $3.2 billion resulting from growth in both our retail and institutional channels. I am pleased to announce that we successfully entered the pension risk transfer market in the second quarter, securing our first deal in which we assumed approximately $320 million in pension liabilities.
“Further demonstrating the diversity and flexibility of our model, we issued $1.1 billion of funding agreements during the quarter, a market in which we continue to gain significant traction.”
Athene said shareholders’ equity increased 29 per cent year-over-year to $8.3 billion.
Last week, Athene announced a new flow reinsurance treaty with Lincoln Financial Group to reinsure traditional fixed and fixed indexed annuities.