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AEGON Unit to Buy New Business, Boost Retirement Platform

In order to strengthen its retirement platform, a unit of AEGON N.V.AEG - Transamerica - has entered into an agreement with Mercer HR Services, LLC. Per the agreement, the former will acquire Mercer's U.S. defined contribution administration book of business. The deal is pending regulatory approvals and is expected to close in the fourth quarter of 2015.

Transamerica remains focused on strengthening its existing retirement services offering. Earlier, this business has gained success and generated growth in the large and mega markets. Since Mercer is known for its solutions in the large corporate benefits administration market, the acquisition will be complementary to Transamerica's services. It will give the unit an added push in boosting its capabilities and becoming one of the leading retirement solutions providers in the U.S.

Per the transaction, the defined contribution business of Mercer will be merged with Transamerica Retirement Solutions. On completion, the deal will allow Transamerica to become the preferred defined contribution record-keeping provider for Mercer's total benefit outsourcing and total retirement outsourcing clients. This will not only enhance this AEGON affiliate's scale of business and assets under administration (AUA), but will also foster an added proficiency in the large and mega corporate market segment. Also, it will allow Transamerica to cater to the seamless Individual Retirement Account roll-over products and retirement counseling services market.

The combined entity is likely to become one of the leading defined contribution record-keepers in the nation in terms of plan participants and assets. Also, Transamerica's retirement plan participants will increase by 917,000 to nearly 5 million post merger. Additionally, the deal is expected to enhance the company's AUA by $71 billion to nearly $216 billion. However, Aegon's 2016 earnings are not likely to be impacted by the acquisition.

Aegon currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the multiline insurance space are Allianz SE AZSEY , Assured Guaranty Ltd. AGO and Old Republic International Corporation ORI . All three stocks sport a Zacks Rank #1 (Strong Buy).

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AEGON N V (AEG): Free Stock Analysis Report

ASSURED GUARNTY (AGO): Free Stock Analysis Report

ALLIANZ AG-ADR (AZSEY): Free Stock Analysis Report

OLD REP INTL (ORI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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