Dutch insurance firm AEGON has completed the divesture of its Hungarian arm to Vienna Insurance Group (VIG) for €620m.

The announcement comes after the European Commission ordered Hungary to withdraw its veto to block the deal.

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The deal is part of Aegon’s November 2020 agreement to sell its insurance, pension, and asset management businesses in Central and Eastern Europe to VIG for €830m.

Aegon CEO Lard Friese said: “Today’s announcement marks an important step in the transformation of Aegon as we narrow our strategic focus to select core and growth markets, and further strengthen our balance sheet.”

Concurrently, Aegon announced a reduction of its debt through a €375m tender offer along with a €300m share buyback.

As per the agreement, VIG will acquire Aegon Hungary Holding B.V. and Aegon Hungary Holding II B.V., which hold a 100% stake in Aegon’s Hungarian arm.

The deal also includes the acquisition of a 45% stake in the Hungarian business of VIG Group by the Hungarian state holding firm Corvinus.

VIG CEO Elisabeth Stadler said: “With the closing in Hungary, we will achieve our target of being among the top three in the market by the end of 2025 already in 2022 and take over the market leadership in Hungary.

“We acquire very well-positioned companies that enrich our broad diversification and offer us new opportunities in asset management and pension fund business. These are two business areas that we want to intensify and expand as part of our ongoing strategy programme VIG 25,” explains.  

The divesture of Aegon’s operations in Poland, Romania and Turkey is yet to receive local regulatory approval. It expects the deal to close in 2022.