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MetLife, Principal target Latin America for deals, expansion

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(Bloomberg) – MetLife Inc. and Principal Financial Group Inc., U.S. insurers that have expanded in Chile with takeovers, are targeting Latin America for additional growth.

“In the case of Brazil, we think that we need to gain more scale,” Roberto Walker, president of Latin America for Des Moines, Iowa-based Principal’s international operation, said Wednesday at an investor meeting. “We are always very actively looking for strategic acquisitions, particularly in the case of asset management and mutual funds.” He said the approach also applies in Mexico.

Principal and New York-based MetLife, the largest U.S. life insurer, are increasingly counting on emerging markets. Both companies held events in Santiago Wednesday focusing on opportunities in Latin America to benefit from the growing number of middle class and affluent savers as governments push for privately managed retirement accounts.

“We’ve grown by acquisitions, and we’ll continue to do that,” Bill Wheeler, head of the Americas atMetLife, told analysts. “But we’ve also grown organically.”

MetLife Chief Executive Officer Steven Kandarian has expanded in Latin America and Asia to add fee income while retreating from some capital-intensive businesses like U.S. variable annuities. His company bought Chilean pension-fund manager AFP Provida SA in 2013 for about $2 billion, and in 2010 MetLife spent $16 billion for American Life Insurance Co., which had operations in more than 50 countries.

Brazil, Mexico

Principal CEO Larry Zimpleman added more than $30 billion in assets under management with the 2013 purchase in Chile of AFP Cuprum SA. The company doesn’t see the need for more major acquisitions there, Walker said.

The insurer’s recent acquisitions in Brazil and Mexico have been more modest. Principal in 2012 bought a stake in Brazil’s Claritas, which had $1.8 billion under management at the time the deal was completed.

Zimpleman in 2011 bought Mexican pension provider HSBC Afore SA de C.V. for about $200 million. Principal is looking for additional deals in the Mexican pension market, as well as acquisitions of mutual-fund and asset-management operations in the country, Walker said.


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