ING To Reduce Stake In U.S. Unit To Below 50%, Raise Gross Proceeds Of $1.2 Bln

(RTTNews) - Dutch financial services company ING Group N.V. (ING) said Wednesday that it will reduce its stake in its U.S. insurance unit ING U.S., Inc. (VOYA) to less than 50 percent following the sale of about 33.8 million shares of common stock in the unit. The company expects gross proceeds from the sale to be about $1.2 billion or 850 million euros, and intends to use the amount to reduce core debt.

ING Group has previously said that over a period of time, it intends to divest its remaining stake in ING U.S. as part of its strategy to separate and divest its insurance as well as investment management businesses.

The company has priced 26.5 million shares of common stock of ING U.S. that is being sold in a public offering at $35.23 per share. In addition, the company is also selling another 7.3 million shares to ING U.S. in a concurrent direct sale.

ING noted the the sale of about 33.8 million shares will reduces its stake in ING U.S. to about 45 percent from about 57 percent at year-end 2013.

Following this transaction, the retained minority stake in ING U.S. will be deconsolidated and will going forward be accounted for as an associate using equity accounting. According to ING, this will satisfy a European Commission restructuring requirement to divest at least 50 percent of ING U.S. before year-end 2014.

As a result of the deconsolidation of ING U.S., the sale of about 33.8 million shares will result in an estimated negative after-tax profit and loss impact of about 2 billion euros that will be booked in ING Group's financial results for the first quarter.

ING Group has granted the underwriters for the offering an option to purchase up to an additional 4 shares. If fully exercised, this will further reduce ING Group's stake in ING U.S. to about 43 percent.

ING U.S. shares trade on the New York Stock Exchange under the ticker symbol "VOYA".

ING shares closed Wednesday's trading at $13.93, down $0.12 or 0.85 percent on a volume of 1.60 million shares.

VOYA shares closed Wednesday's trading at $35.23, down $1.07 or 2.95 percent on a volume of 2.77 million shares. However, in after-hours, the stock gained $0.51 or 1.45 percent to $35.74.