The biggest financial services firm in the Netherlands, ING Group, has raised €1.54bn from the sale of shares in its insurer NN Group NV. The IPO is the largest European listing in over three years, with ING selling 77 million shares at a starting price of €21 above the estimated sales price. The move has raised significant capital for ING which is looking to regain its footing following a bailout in 2008.
The move has raised significant capital for ING which is looking to regain its footing following a bailout in 2008
Including a conversion of €450m in mandatory exchangeable notes under an agreement with three Asian investors, gross proceeds from the listing amounted to about €2bn.
The sale of a 28.6 percent stake in NN Group brings ING closer to the end of a restructuring programme imposed by EU regulators and the proceeds will be used to pay debt and further unwind the firm into more of a stable bank.
“We remember how we built this company and it’s a mixed emotion,” ING Group Chief Executive Ralph Hamers said at the Amsterdam stock exchange. “We had to end one era to start a new one. The listing today is the final step in turning ING from a bancassurer into a bank”.
Having raised a significant amount of money but still keeping a majority ownership in NN, ING shares rose 0.4 percent, giving the company a market value of €40.5bn.
ING had initially said that it would only offer 70m shares, but chose to increase the offering shortly before the IPO in order to meet ‘significant investor demand,’ a statement said. The company must sell at least 50 percent of NN by 2015 and be rid of the arm entirely by 2016, as part of the demands from the Dutch government, which gave ING a €10bn capital injection after it saw serious losses to assets backed by US mortgages during the financial crisis.
NN is currently considered the biggest life insurer in the Netherlands, based on gross written premiums, and is also the largest provider of mandatory pensions in Poland and Romania. With the offer price, the insurer is now valued at more than €7bn and its sale could finally bring ING’s finances back to solid ground.
ING, which will continue as a Europe-focused bank after the restructuring, also said that it had recently sold a remaining 10 percent stake in Brazil’s Sul America SA through a block trade for about €170m.
