AMSTERDAM, Aug. 19 (Reuters) – Goldman Sachs (GS.N) announced Thursday that it will buy the wealth management division of Dutch insurer NN Group for EUR 1.7 billion ($ 1.98 billion) in 2018 .
The transaction is part of Solomon’s strategy to make the bank’s source of income less dependent on revenue from trading and advice on transactions. The Wall Street firm plans to expand in areas such as wealth management and expand its presence in regions outside of the United States.
“This acquisition allows us to accelerate our growth strategy and expand our asset management platform,” Solomon said in a statement.
NNIP, or NN Investment Partners, has $ 335 billion under management and the acquisition will double the total assets Goldman Sachs manages in Europe to more than $ 600 billion.
Goldman said NNIP’s 900 employees will move to GS and the Netherlands will become a “significant location” in its European business.
Goldman is the latest major financial firm to step up operations in the Netherlands after the UK left the European Union, although NNIP is based in The Hague rather than Amsterdam, the country’s main financial center.
As part of the deal, NN Group (NN.AS), the Netherlands’s largest insurer, has committed to keep its $ 190 billion portfolio of insurance assets under NNIP management after joining Goldman.
“The combined investment expertise and size will enhance the service offering to NN Investment Partners’ clients, including the NN Group,” said NN CEO David Knibbe.
NN said the sale of NNIP would improve its Solvency II ratio of 209% by 17 percentage points at the end of June, and the proceeds would be used for acquisitions or additional returns to shareholders. The ratio is a measure of how much extra money to act as a buffer in falling markets.
“Given the company’s already strong capitalization, sufficient to fund its organic growth opportunities, and the lack of obvious M&A targets, the potential for significant excess capital returns in the coming year (s) is evident,” Credit Suisse said in a comment on the Deal. The price paid by Goldman was a little higher than expected, it said.
NN Group shares fell 1.1% to 43.77 by 0844 GMT and are up 23% year-to-date.
The Dutch company’s wealth management arm had also piqued the interest of other insurers and wealth managers, including UBS (UBSG.S), Germany’s DWS (DWSG.DE) and the US name Nuveen, Reuters reported in June.
($ 1 = 0.8565 euros)
Reporting by Toby Sterling, Rachel Armstrong, and Pam Barbaglia; Editing by Ana Nicolaci da Costa and Emelia Sithole-Matarise
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