Dutch insurer Aegon is to cut its Mexican presence by selling its stakes in Seguros Banamex Aegon and Afore Banamex Aegon for $1.24bn (£863.1m) to Citigroup, the largest US financial services group.
Aegon, the biggest foreign insurer in the United States, said it would use its estimated gain of $800m (£557m) to help cover bad loans, including those to bankrupt energy giant Enron.
The Dutch group, which has a market cap of €40bn (£24.5bn), also said it would strengthen its existing €4.4bn (£2.7bn) bond default provisions by around $300m (£209m), to cover losses from companies who could not make the due interest payments on bonds.
Aegon said it had agreed to sell its interests in life insurance company Seguros Banamex Aegon and pension fund management firm Afore Banamex Aegon to Citigroup's Grupo Financiero Banamex. The move had been widely expected.
The Banamex business contributed €25m (£15.3m) or 0.6% of Aegon's 2001 earnings.
For Citigroup, the acquisitions are an expansion of its Mexican business, which it bought for $12.4bn (£8.6bn) in May 2001.
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