Aegon sell Mexican venutes

January 18, 2002 Posted: 0924 GMT

LONDON (CNN) -- Dutch insurer Aegon agreed on Friday to sell stakes in two Mexican joint ventures to its partner Citigroup for $1.24 billion.

Aegon, the Netherlands' second-largest insurer, said it plans to sell Seguros Banamex Aegon life insurance and Afore Banamex Aegon pension fund management to Citigroup's Grupo Financiero Banamex-Accival.

The Hague-based insurer has been considering the sale after Citigroup bought Banamex-Accival, the No. 2 Mexican bank known as Banacci, for $12.5 billion in May, 2000. The sale is expected to have slightly negative impact on earning and earnings per share, Aegon said.

Income before tax from Aegon's activities in the joint venture amounted to $53 million for the first nine months of 2001.

Aegon expects to book gain of $800 million from the sales, with $500 million credited to shareholders' equity and the remaining $300 million as a capital gain. It also plans to strengthen its default reserves as a result of increased default activity in its bond portfolios.

Aegon maintained its forecast for 2001 earnings to rise 12 to 17 percent.