(Updates with minister’s comments in the second and fourth paragraphs.)
June 6 (Bloomberg) -- ASR Nederland NV, the Dutch insurer nationalized after the collapse of Fortis in 2008, will be allowed to bid for state-owned SNS Reaal NV’s insurance business, Finance Minister Jeroen Dijsselbloem said.
“Financial markets are in better shape” and the sale of the SNS Reaal unit “is a logical first step” in the restructuring of the company, he told reporters in the Hague today. “We did not want to exclude the possibility of ASR making an offer.”
The announcement came a day after ING Groep NV, the biggest Dutch financial-services company, outlined plans to sell its European insurance unit NN in an initial public offering.
The sale will start in the summer with an auction and the process could take months, Dijsselbloem said.
ASR will be allowed to attract new equity to finance a possible takeover of SNS Reaal’s insurer, Dijsselbloem said. The government will not provide more capital to ASR and it reiterated that ASR may also be sold through an IPO.
“ASR didn’t get any state aid, so ASR does not have any limitations on acquisitions, though the European Commission will monitor the process,” Dijsselbloem said in a letter to Parliament. A winning bid by ASR for SNS Reaal’s insurance units is subject to government approval and will depend on its financing plan, he said.
The Netherlands, owner of two of its biggest banks and insurers, is under pressure to restore competition in the finance industry while recouping as much taxpayers’ money spent on the bailouts as possible.
Dutch taxpayers spent 3.7 billion euros ($5 billion) on SNS Reaal’s rescue and it was nationalized in 2013 after losses on real estate loans brought it to the brink of collapse. The insurance business had a book value of 2.6 billion euros at the end of last year, the company said in February.
The outlook for life insurers is “unfavorable,” the Dutch central bank said in April. Premium income has fallen since 2008 amid competition from savings products offered by banks and a tarnished image due to claims regarding unit-linked policies, it said. Payouts have exceeded premiums, measured as a portion of assets, since 2009, according to central bank data.
The sale of ASR via an IPO or private placement may take place after the SNS Reaal and NN transactions, Dijsselbloem said.
“I deem the risk too high that, if three insurers are brought to the market simultaneously, the market’s limited absorption power will block a successful sale of ASR,” he said.
--With assistance from Fred Pals and Martijn van der Starre in Amsterdam.