Principal Financial Group, Inc. (NYSE:PFG), a global investment management leader, announced today that it has signed a definitive agreement to acquire AFP Cuprum S.A. (Cuprum). The agreement requires Empresas Penta S.A. and Inversiones Banpenta Limitada to sell their 63 percent ownership in Cuprum pursuant to a public tender offer that will also include the remaining 37 percent of publicly traded shares. This action, combined with its current business in Brazil, Chile and Mexico, will give The Principal ® an even larger presence in faster growing emerging markets.
Based on current exchange rates, the purchase price for 100 percent of the company is approximately USD$1.51 billion, subject to adjustments for pre-closing dividends. Pending Chilean regulatory approval and the fulfillment of other conditions, the transaction is expected to close in first quarter 2013 and be immediately accretive to EPS and ROE.
Cuprum, a leading pension manager in Chile, has approximately USD$32.1 billion of assets under management 1. Cuprum products include mandatory employee-funded pension plans, voluntary pension products (APV), and other long-term savings products. The Chilean pension market has consistently grown at double-digit rates driven by a large and expanding middle class, stable economic growth and robust growth in voluntary pension products.
“The acquisition of Cuprum, combined with Principal International’s current success in the Chilean annuity, mutual fund and voluntary pension markets, will generate accelerated growth because of our ability to now offer customers in Chile an unmatched line-up of pension savings and retirement income solutions – from hire through retire,” said Luis Valdes, president and CEO of Principal International. “Cuprum has a strong leadership position in the Chilean pension market with the highest increase in market share among high value customers. We’re excited to bring them into our global investment management family, provide greater opportunities for customers and employees, and together contribute to long-term growth.”