Delta Lloyd updates on acquisition by NN Group

Dutch insurer Delta Lloyd expects to receive the regulatory approval for the company’s €2.5 billion  takeover by its competitor NN Group in the second quarter of 2017 but warns on the risks of the deal.

After having rejected an unsolicited takeover offer, Delta Lloyd’s executive and supervisory boards recommended an improved acquisition offer by NN Group.

“It will create a leading insurance and pension company in the Dutch market, with a strong presence in Belgium and an attractive proposition in asset management and banking,” said Hans van der Noordaa, Delta Lloyd executive board chairman, in the company’s 2016 annual report.

Delta Lloyd offers products and services in insurance, pensions, investment and banking, serving commercial and retail clients. It operates under the brands Delta Lloyd, ABN AMRO Insurance, BeFrank and OHRA. NN Group operates in insurance and asset management.

“By joining forces with NN Group we will be stronger in all our markets and our customers will benefit from a solid capital position and excellent capabilities for innovation and product development. Unfortunately, our well respected Delta Lloyd brand will disappear and the combination of the two companies will result in uncertainty for employees and job losses,” Van der Noordaa noted.

Delta Lloyd warned on the risk of losing employees, key people and business partners as a result of the uncertainty caused by the conditional takeover by NN Group, resulting in discontinuity of key processes. A combination of Delta Lloyd and NN Group could provide strategic and capital benefits and synergy opportunities through scaling, capabilities, knowledge sharing and cost reductions, the company said. However, it could also present the following threats for Delta Lloyd in the short and medium term: New business for Delta Lloyd labelled products may dry up when the brand disappears. Also, uncertainty about the future could have a significant impact on the motivation and behaviour of Delta Lloyd employees. Finally, key personnel may leave.

Delta Lloyd agreed with NN Group not to finalise the October 2016 agreed merger between its Belgium and Dutch Life activities, which aimed at delivering solvency benefits and economies of scale, before completion of the acquisition of Delta Lloyd by NN Group.

Delta Lloyd is working towards achieving the shareholder, regulatory and antitrust approvals required to complete the deal with NN Group and expects these in the second quarter.

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