ING ING announced today that ING U.S., Inc., its U.S.-based retirement, investment
and insurance business, has filed a preliminary prospectus with the U.S.
Securities and Exchange Commission (SEC) in connection with its proposed
Initial Public Offering (IPO).
The proposed IPO will consist of both a primary component offered by ING U.S.
and a secondary component offered by ING Group, both at a currently estimated
price range of USD 21.00 to USD 24.00 per share. Based on this price range,
the total offering would be USD 1.4 billion to USD 1.5 billion in size,
including USD 0.6 billion in primary proceeds for ING U.S. and between
approximately USD 0.8 billion and USD 0.9 billion in proceeds from the
secondary offering for ING Group. The proposed IPO would reduce the ownership
of ING Group in ING U.S. to 75%.
The underwriters have the option to purchase an additional number of ING U.S.
shares from ING Group at the initial public offering price, corresponding to a
maximum of 15% of the total number of shares offered in the proposed IPO.
Fully exercising this overallotment option would further reduce ING Group's
remaining stake in ING U.S. to approximately 71%.
ING Group intends to use the proceeds from the secondary offering for the
reduction of Group core debt. The USD 1.5 billion contingent funding facility
currently in place between ING U.S. and ING Bank N.V. will also be cancelled
upon completion of this offering.
The offering announced today will not impact the profit and loss account of
ING Group, as ING U.S. will continue to be fully consolidated by ING Group.
Upon completion, and excluding the overallotment option, this offering would
have a negative impact of approximately EUR 1.6 billion (at the midpoint of
the estimated price range) on the Shareholders' equity of ING Group. This
reflects the difference between the net proceeds of this offering to ING Group
and the estimated IFRS book value of the 25% stake divested through this
offering at IPO. This offering will not have a material impact on the
regulatory capital of either ING Insurance or ING Bank.
As previously announced, ING Group is divesting its insurance and investment
management businesses as part of a restructuring programme agreed with the
European Commission. The base case for the divestment of ING U.S. is through
an IPO as described in this announcement. Following the proposed IPO, ING
intends to divest its remaining stake in ING U.S. over time, as previously
agreed with the European Commission. The sale of any remaining shares is
subject to a lock-up period of 180 days from the publication of the final
prospectus.
ING U.S. is in the process of preparing its consolidated U.S. GAAP financial
statements for the quarter ended 31 March 2013, and has included in the
prospectus preliminary qualitative statements on its first quarter results.
Based on preliminary estimates and subject to completion of its financial
closing procedures, ING U.S. expects the quarter's operating earnings before
income taxes for the Ongoing Business to be materially consistent with the
trends previously disclosed in the registration statement and reflecting
continued execution on its business development and performance goals. The
preliminary prospectus notes that ING U.S.'s Closed Block Variable Annuity
equity hedge program focuses on protecting regulatory and rating agency
capital rather than earnings, and will generate losses when equity markets
increase. Given the significant equity market appreciation during the first
quarter of 2013, which is economically a positive for ING U.S. over the long
term, as well as the impact of non-performance risk, ING U.S. may incur a net
loss on a Company consolidated basis. This summary is not a comprehensive
statement of the financial results of ING U.S. for this period, and actual
results may differ materially from these estimates due to the completion of
financial closing procedures, final adjustments and other developments that
may arise between now and the time that the consolidated financial statements
for this period are issued. ING U.S. expects to be in a position to supplement
this summary with further information regarding its results prior to the
pricing of this offering.
Morgan Stanley & Co. LLC, Goldman, Sachs & Co., and Citigroup Global Markets
Inc. are acting as active joint book-running managers for the offering.
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