Iowa Insurance

ING Groep NV, the giant Dutch Finance, is a cornerstone of carving American life insurance market at a high price, $ 2.2 billion, but it is also ready to spend billions more to satisfy their ambitions on the markets U.S. capital.

ING said yesterday that it had agreed to buy Equitable of Iowa businesses for $ 2.2 billion in cash and stocks, but also assume that $ 400 million in bonds, effectively doubling the size of the U.S. administration life insurance business for more $ 20 billion.

In addition to insurance, ING is concerned about the extension of the U.S. Department of investment banking and asset management companies, Cees Maas, the company Chief Financial Officer, said in an interview yesterday. It already has major banks and asset management and insurance companies, produces each year revenue of over $ 28 billion.

The Dutch company has recently shown interest in the acquisition of two U.S. investment banks: Dillon, Read & Company in New York, Swiss Bank Corporation to purchase agreed in May to $ 600 million in camps and Montgomery Securities of San Francisco, the nation Bank has recently purchased for $ 1.2 billion.

Mr. Maas was to submit comments on these two is it, but ING confirms the desire to take forward work in these two areas Investment Banking and Asset Management.

”What we still lack,”he said ,”” distribution in the investment banking products to the USA. While ING own affairs in this country, he spoke melancholy on finding the right acquisition.

”We are ready to pay a high price, when it suits them well,”he said, the group discuss the general approach to acquisitions.

There have been disappointments, as ING has sought to expand their American life insurance business through acquisitions. He continues First Colony Corporation, which was eventually acquired in August 1996 by GE Capital, before focusing on business Equitable of Iowa. Equitable of Iowa sells a wide range of old-age part-time savings products, and is particularly strong in pensions.

The store was announced yesterday, in the absence of surprise for analysts. ”It was a head of shopping list that we have, what they want to buy.”Says Robert W. Yates, head of the international part of the London subsidiary of Fox-Pitt Kelton, a brokerage firm.

ING pays $ 68 a share to buy Equitable of Iowa, in terms of the transaction, which was approved by both companies’ Boards. It is financing the acquisition with a mixture of shares and cash, as shareholders. The cash - but only up to 50 percent of the price to pay. The acquisition, which must also be approved by shareholders and regulatory authorities, it is expected by the end of the year.

The price, about 2.7 times book value, is high for a purchase in the life insurance business, said analysts. But Equitable - which is in no report on the Equitable companies, the giants of New York insurers - still profitable and has a better return than many of his fellow age.

Investors reacted positively to the purchase yesterday, sending shares of Equitable of Iowa for $ 8.50 or 14.8 per cent to nearly $ 65875 at the New York Stock Exchange. ING’s American Depository Receipts, also rose on the Big Board, gaining $ 3.25 or 6.7 percent to nearly $ 51.50, a full 52 weeks. Each ADR represents one share of the Dutch society.

Mr. Yates said the market reacted positively because the benefits to ING per share result war”ein and because it is good business and good society.”He said that the investor is not regard the transaction as a narcotic or seemingly believes that ING has too.

S. Fred Hubbell, Chairman and Chief Executive of the Equitable of Iowa, said he decided the sale of Des Moines, families, businesses controlled week after talks with ING best leaders,”it became clear that I do, that his activity was a perfect complement for us, the USA.”

Elle”peut be that we have a quantity of financial resources that enable us to develop much faster,”he added. ”We have here a situation where 2 and 2 are really be 5