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Principal Financial Group Completes Cuprum Acquisition, The Premier Chilean AFP Pension Company

Stocks in this article: PFG

Principal Financial Group, Inc. (NYSE:PFG), a global investment management leader, today announced that the AFP Cuprum S.A. (Cuprum) acquisition is complete. On Oct. 8, 2012, The Principal ® announced a definitive agreement to acquire Cuprum, which required Empresas Penta S.A. and Inversiones Banpenta Limitada to sell their 63 percent ownership in Cuprum pursuant to a public tender offer that also included the remaining 37 percent of publicly traded shares, which has been completed giving The Principal a 90.4 percent ownership stake in Cuprum. The Principal intends to acquire the remaining shares after completion for a total purchase price of USD$1.5 billion less assumed debt.

The transaction was immediately accretive and is expected by the company to benefit 2013 EPS by approximately 12 cents and 23 cents in full year 2014. The transaction is estimated to improve total company ROE by 45 bps in 2013 and 75 bps in 2014.

Cuprum, a leading pension manager in Chile and among the fastest growing, has approximately USD$32.7 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 and affluent market, stable economic growth and robust growth in voluntary pension products.

"The combination of Cuprum and The Principal provides customers in Chile with an unparalleled array of retirement savings, asset management and retirement income solutions,” said Luis Valdes, president and CEO of Principal International. "Cuprum already has a leading pension brand in Chile, and now adds the backing of a global retirement and investment management leader in The Principal."

According to Larry Zimpleman, chairman, president and CEO at The Principal, “the Cuprum acquisition further strengthens our competitive position in one of the most attractive emerging retirement and long-term savings markets. Cuprum represents the sixth such transaction for The Principal in the past two years and adds meaningfully to our fee-based earnings, giving us continued financial flexibility.”

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