See accounting policy H.
Acquisitions 2023
Aegon Nederland
On 4 July 2023, a.s.r. announced the completion of the business combination between a.s.r. and Aegon Ltd. (formerly known as Aegon N.V.) by acquiring the shares of Aegon NL. The consideration consists out of three elements:
Payment of 63,298,394 newly issued ordinary shares to Aegon Ltd. (29.99% interest in a.s.r. post transaction) with a value of € 2.6 billion;
A cash consideration of € 2.3 billion which was funded through existing surplus capital, by offering 13,805,720 new ordinary shares (accelerated bookbuild offering) in 2022 and the issuance of a Tier 2 subordinated liability of € 1 billion in 2022 and;
Additionally, certain asset management services have been exchanged between a.s.r. and Aegon Ltd. as part of the business combination (third party mortgage and illiquid funds have moved to Aegon Ltd. while a.s.r. will manage liquid asset categories relating to the general account of Aegon NL). In aggregate, the fair value transferred to Aegon Ltd. in relation to these asset management activities is valued at € 75 million.
Aegon NL was the group company of a number of entities, the main being Aegon life, Aegon Spaarkas N.V. (Aegon spaarkas), Aegon Schadeverzekering N.V. (Aegon non-life), Knab, Aegon hypotheken, TKP Pensioen B.V. (TKP Pensions), Robidus groep B.V. and Nedasco B.V. Aegon NL and its subsidiaries are active in life insurance and pensions operations, savings and investment products, accident and health insurance, general insurance, banking operations, mortgages, pension administration and intermediary activities. Aegon NL has been legally merged into a.s.r. as per 1 October 2023. Furthermore, Aegon non-life has legally merged into ASR Schadeverzekering N.V. (a.s.r. non-life) on the same date.
With this business combination, a.s.r. will reinforce its strengths in the Dutch market, significantly enhancing its strategic positioning across both Non-Life and Life and improving its distribution and services capabilities. The Aegon name and brand will continue to exist for a period of two to three years. The main office of Aegon NL will remain located in The Hague until the end of 2024. The full integration of the activities of Aegon NL into a.s.r. will take place in phases and is expected to be largely completed within three years.
In December 2023, a.s.r. established the final acquisition balance sheet of Aegon NL, in accordance with IFRS 3 business combinations, within twelve months of the closing date. The balance sheet is based on fair value and uses the following techniques and assumptions:
Insurance contract liabilities acquired have been measured under the GMM, VFA and PPA models and were remeasured to fair value as defined in IFRS at the date of acquisition. This resulted in a market value based on the multiple of Solvency II Eligible Own Funds Unrestricted Tier 1 methodology for the Non-Life and Life portfolios;
Intangible assets recognised relate to customer and intermediary relationships in the Asset Management and Distribution & Services segments, Aegon NL’s brand names (including Knab, TKP and Robidus) and software in the Distribution & Services segment. The valuation techniques used to measure the fair value are based on either the Multi-period Excess Earnings Method (MEEM) or the Relief from Royalty method;
Financial assets and liabilities were remeasured to fair value at the closing date.
The fair value of the asset management services transferred as part of the business combination has been determined using a dividend discount model, taking into account an estimate of market consistent margins, the future development of portfolios in scope as well as related capital requirements.
| | Acquisition date balance sheet based on fair value |
|---|---|
| Intangible assets | 348 |
| Property, plant and equipment | 91 |
| Investment property | 2,409 |
| Associates and joint ventures at equity method | 207 |
| Investments | 51,862 |
| Investments related to direct participating contracts | 18,249 |
| Derivatives | 8,409 |
| Deferred tax assets | 489 |
| Reinsurance contract assets | 185 |
| Other assets | 607 |
| Cash and cash equivalents | 4,528 |
| Total assets | 87,384 |
| | |
| Insurance contract liabilities | 30,539 |
| Liabilities arising from direct participating insurance contracts | 23,226 |
| Employee benefits | 2,340 |
| Provisions | 44 |
| Borrowings | 5,223 |
| Derivatives | 7,987 |
| Savings deposits | 11,258 |
| Due to banks | 900 |
| Other liabilities | 786 |
| Total liabilities | 82,304 |
| | |
| Net assets and liabilities | 5,080 |
| | |
| Less consideration paid | 4,917 |
| Less Non-controlling interests | 10 |
| Gain as a result of the purchase | 153 |
The gain as a result of the purchase is directly recognised as other income in the income statement on the acquisition date. The gain mainly reflects the IFRS requirement to identify and value intangible assets which have previously not been recognised on the balance sheet of Aegon NL as these have been internally generated. Through the acquisition accounting under IFRS, these previously unrecognised intangible assets are recognised in the acquisition balance sheet. The gain arose as a result of Aegon Ltd. making a strategic decision to sell Aegon NL, as this fits in the Aegon Ltd’s strategy to accelerate its ambition to create leading businesses outside the Netherlands. The gain as a result of the purchase is tax-exempt, attributed to the acquirer a.s.r. and not allocated to the Non-life, Life or other segments.
| | Acquisition date |
|---|---|
| Cash consideration paid | -2,260 |
| Acquired cash and cash equivalents | 4,528 |
| Increase in cash and cash equivalents at acquisition date | 2,268 |
The consolidated statement of comprehensive income of a.s.r. for the first year includes € 3,298 million revenue and - € 73 million result after tax relating to Aegon NL for the period commencing 4 July 2023. The revenue and profit of the combined entity for the current period, as though the acquisition date for the business combination of Aegon NL had been as of the beginning of 2023, would have been € 5.992 million revenue and € 164 million profit after tax. The acquisition-related costs recognised as expense amount to € 15 million including VAT (of which € 11 million incurred in 2023) and are included in the line-item other expenses in the income statement.
Other acquisitions
a.s.r. acquired an entity in segment Non-life and three entities in segment Distribution and Services.
Acquisitions 2022
Wind farms Jaap Rodenburg, Nieuwe Hemweg and Strekdammen and solar park Pesse
In 2022, ASR Infrastructure Renewables B.V. completed the acquisitions of the assets and liabilities of wind farms Jaap Rodenburg, Nieuwe Hemweg, Strekdammen and solar park Pesse.
Other acquisitions
ASR Real Estate B.V. acquired the assets and liabilities of a consultancy company as of 1 May 2022. a.s.r. established the final acquisition balance sheet in the first half year of 2023. VKG acquired a distribution and services company as of 1 July 2022 and a.s.r. established the final acquisition balance sheet in the second half year of 2023.