Aegon has agreed to sell its Central and Eastern European business for €830m to Vienna Insurance Group (VIG).

This agreement covers the insurer’s insurance, pension and asset management business in Hungary, Poland, Romania and Turkey.

The deal value is said to represent a multiple of 2.6 times the company’s book value on 30 June 2020.

This transaction is anticipated to improve the Group Solvency II ratio by approximately 8% points, the company noted.

The proceeds from the sale will be used to support Aegon’s financial flexibility to execute its strategic priorities, including deleveraging.

Aegon CEO Lard Friese said the transaction will simplify the company’s footprint and strengthen its balance sheet.

Friese said: “We are sharpening our strategic focus and are concentrating on those countries and business lines where Aegon can create most value.

“I would like to thank our employees in Hungary, Poland, Romania and Turkey for their significant contribution to Aegon over the years. We believe that our businesses will benefit greatly from the vast experience of VIG, a leading insurance group in the region.”

The purchase is expected to considerably bolster VIG’s position in the central and eastern European insurance space.

Commenting on the deal, VIG CEO Elisabeth Stadler said: “The acquisition of the Central and Eastern European business of Aegon is an important step for our Group to sustainably strengthen our leading position in CEE and to take advantage of new opportunities. The portfolios of the companies included in the scope of the transaction perfectly complement our existing units and strengthen our diversification in these countries.”

VIG expects to become a leading player in Hungary after the close of the transaction.

The deal, subject to regulatory and antitrust approvals, is expected to close in the second half of next year.