Dutch partners agree to forge ahead

Dutch bank ABN AMRO Netherlands has announced that it will not
exercise its right to buy out Delta Lloyd Group’s stake in their
bancassurance joint venture (JV) in the Netherlands.

A significant, but not surprising, about-turn by ABN AMRO which
in May 2008 announced that is was to exercise its right to buy
Delta Lloyd’s 51 percent stake in the JV, ABN AMRO Insurance (AAI).
The Dutch government acquired full control of ABN AMRO Netherlands
in October 2008.

“In light of the altered conditions in the past six months, the
parties have decided that continuation of the current successful
partnership is the most sustainable option,” Delta Lloyd, a unit of
UK insurer Aviva, said in a statement.

In September 2008 the Dutch, Belgian and Luxembourg governments
announced a €11.2 billion ($14 billion) rescue package for Fortis’s
ailing banking operations.

The right to buy out Delta Lloyd’s stake in AAI formed part of
the 30-year exclusive agreement between the JV partners when AAI
was formed in 2003.

Under the agreement ABN AMRO had the right to terminate the JV
should either shareholder change hands. In October 2007 just such a
change of control occurred when Fortis acquired ABN AMRO’s Dutch
operations for €24.7 billion.

At the time of the formation of AAI Delta, Lloyd paid ABN AMRO
€262.5 million in cash for the 51 percent stake. This also gave it
management control of AAI which is active in the life and general
insurance markets.

In 2007, Delta Lloyd, which operates under the Delta Lloyd, OHRA
and AAI brands, reported total income of €9 billion, including €6.6
billion in gross premium income, and a net profit of some €781
million.