ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, December 31, 1996 TAG: 9612310138
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: LOUISVILLE, KY.
SOURCE: Associated Press
Dutch insurer Aegon NV plans to buy Providian Corp.'s insurance business for $3.5 billion, becoming the latest big European player to stake a claim in the lucrative U.S. market.
The takeover, announced Monday, also comes as life insurers are merging to fend off competition for consumers' savings from banks and mutual fund companies. As part of the transaction, Providian will spin off its Providian Bancorp unit to its own shareholders.
Providian shareholders will receive one share of Aegon and one share of Providian Bancorp for each of their common shares. The value of Aegon stock being exchanged is $2.62 billion.
The rest of the price comprises $780 million in debt and $100 million in preferred shares.
``It looks like a very good deal,'' said Hans Pluijgers, a banking analyst at the Dutch brokerage firm Kempen & Co. ``And considering the possibilities for integration, I think the price is fair.''
Louisville-based Providian, which changed its name from Capital Holding two years ago, said the deal will allow it to focus on its fast-growing consumer-lending and banking business. The San Francisco-based banking unit will be spun off just before the buyout.
LENGTH: Short : 34 linesby CNB