A unit of Principal Financial Group Inc. has agreed to acquire HSBC AFORE S.A. de C.V. from a unit of HSBC Holdings P.L.C. for the equivalent of $198 million.

Principal Financial Group S.A. de C.V. manages the equivalent of about $4.7 billion in pension assets in Mexico.

HSBC AFORE manages the equivalent of $2.9 billion in retirement account assets Mexicoin the country for 1.6 million customers.

Principal, Des Moines, Iowa, (NYSE:PFG), and HSBC, London, hope to get the regulatory approvals they need to close on the deal between June 30 and Sept. 30.

Principal plans to combine the Principal Financial and HSBC AFORE businesses under the name Principal AFORE. The 1,100 HSBC bank branches in Mexico would continue to distribute the Principal AFORE products, Principal says.

In Mexico, an “AFORE,” or “Administradora de Fondos para el Retiro,” is an individual retirement account manager.

Principal AFORE would have about 7% of Mexican AFORE assets under

management and 11% of Mexico’s AFORE customers, Principal says.

“The HSBC AFORE business fits naturally with our international strategy, providing critical scale and expanding our growing base in key emerging markets like Mexico,” Norman Sorensen, chairman of Principal International, says in a statement about the deal.

Principal has a track record of doing business in Mexico and Latin America, and it has integrated other AFORE businesses since entering the Mexican market in 1993, Sorensen says.

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