(Bloomberg) — ING Groep NV, the biggest Dutch financial-services company, raised $1.18 billion with a sale of shares in its U.S. insurance unit as the parent company ended its majority stake.
The Dutch company sold 26.5 million shares in a public offering at $35.23 apiece, yesterday’s closing price in New York, ING U.S. said in a statement. The New York-based unit, which is changing its name to Voya Financial Inc. this year, agreed to buy another 7.26 million shares held by its parent for about $34.45 a share.
The agreement to buy back shares, announced this week, is “a favorable development,” Jay Gelb, an analyst at Barclays Plc, said in a March 18 report. “Voya’s capital position is strong and it appears on track” to reach its goal for ongoing return on equity of 12 percent to 13 percent by 2016.
ING Groep said in a statement it will use proceeds to pay debt. It is exiting the U.S. life business to comply with terms of a 2008 bailout. The Dutch company divested shares in an initial public offering in May for $19.50 apiece and had another sale in October.
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ING U.S. has surged about 81 percent since the IPO. It declined 3 percent to $35.23 in New York before yesterday’s announcement. ING Groep advanced 0.6 percent at 10:10 a.m. in Amsterdam to 10.18 euros.
The parent company’s sales of 33.8 million shares will cut its ownership stake in the U.S. business to 45 percent from 57 percent. Underwriters have the option to purchase an additional 3.98 million shares, ING U.S. said. That would trim ING Groep’s holding to 43 percent.