has agreed to acquire
, one of the largest publicly held U.S. life insurers, for $5.1 billion in cash and the assumption of $1 billion in debt, substantially expanding the U.S. operations of the Dutch financial services conglomerate.
Under terms of the agreement, ING will pay $54 in cash for each share of ReliaStar. The price is a 75% premium over the company's closing price Thursday of 30 13/16 before the shares rose 40% on Friday on acquisition rumors to close at 43.
The purchase would catapult ING to No. 8 from No. 19 in terms of total life and annuity premiums in the U.S., with assets under management almost doubling to $75 billion from $39 billion and annual premium income rising 51% to $12.4 billion from $8.2 billion.
The transaction is expected to close in the third quarter and will be financed internally.
ING said that it expects the deal to immediately contribute 0.1 euro in net profit per share in 2000 and 0.34 euro in 2001.
ING is one of the world's largest financial services firms, along with France's
and the U.S.'s
ReliaStar, currently the No. 8 largest publicly held life insurance company in the U.S., has a large asset management business in
Shares of ReliaStar rose 7, or 16%, to 51 in Monday morning trading, while ING's American depositary receipts rose 3/16, or 0.35%, to 54 1/8. (ReliaStar closed up 6 3/4, or 15%, at 50 3/4 while ING closed up 1 7/8, or 3%, at 55 13/16.) ING's shares on the Amsterdam exchange are up 0.41 euro, or 0.68%, to 60.43 euros in Monday afternoon trading. (ING's shares on the Amsterdam exchange closed up .09 euro, or 0.15%, at 60.11 euros.)