ING’s major step forward in the US

In a move that will substantially
enlarge its footprint in the US pensions market, Netherlands
bancassurer is to acquire defined contribution pensions plan
administrator CitiStreet, a 50:50 joint venture between global
financial services providers Citigroup and State Street
Corporation, in a $900 million cash deal.

Acquisition of CitiStreet, which reported $262 billion assets
under administration in the US at the end of March 2008, will boost
ING into the position of third-largest defined contribution
business in the US.

 “This acquisition significantly expands our existing
footprint in our retirement services businesses in the US and will
help drive long-term growth in the US retirement savings
marketplace,” said ING Insurance America CEO Tom McInerney. He
added that CitiStreet’s scale in the mid- and large-corporate
markets complemented ING’s focus on the small- and mid-corporate,
government, and education markets.

When merged with ING’s existing US operations, ING will have
defined contribution plan assets under management and
administration of $351 billion. Based on the total number of
pension plan participants, 14 million, ING will be the second
largest player in the market. CitiStreet will add 12 million plan
participants.

In addition to its US operations ING will also acquire as part of
the deal CitiStreet’s defined benefit/pension business in the US, a
health and welfare business in the US, and a retirement services
business in Australia. At the end of 2007 CitiStreet had assets
under administration of $20 billion outside the US in pension plans
serving 1 million participants.

Commenting on the reason for the sale of CitiStreet Charles D
Johnston, president of Citigroup unit Citi Global Wealth Management
said: “CitiStreet is an industry leader, but retirement plan record
keeping and administrative services are not strategic priorities
for us.”

ING anticipates that the acquisition of CitiStreet will be closed
in the third quarter of 2008 and be earnings accretive by 2010
after merger-related expenses and the amortisation of certain
intangible assets. The deal will be financed from existing internal
resources and have no impact on ING’s ongoing share buy-back
programme.