CORRECTED-Dutch insurer Aegon sells Canadian life business for C$600 mln
(Corrects ownership of Wilton Re in paragraph 7)
AMSTERDAM Oct 16 (Reuters) - Dutch insurer Aegon announced on Thursday it would sell its Canadian life business to Bermuda-based reinsurer Wilton Re Holdings, saying the decision to leave a market where it was not a leader would improve the company's return on equity.
The company said it would use the C$600 million ($532 million) proceeds of the sale to reduce debt by redeeming a 500 million dollar bond which had been due in December 2015.
Aegon said the combination of the sale and the debt reduction would improve Aegon's return on equity by 0.4 percentage points while reducing net underlying earnings by less than 1 percent.
The sale price implies a multiple of 23 times net underlying earnings, the company said, with the Canadian business making a net profit of C$26 million in the 12 months to June 2014.
"We continually review the performance of our business to ensure that they support our ambition to become a leader in our chosen markets," said Aegon chief executive Alex Wynaendts in a statement.
"We have concluded that our Canadian life insurance business does not support that goal."
Unlisted Wilton Re, which was bought earlier this year by Canada Pension Plan Investment Board (CPPIB), specialises in buying closed blocks of life insurance policies. It has spent more than $1.7 billion on reinsurance and on insurance mergers and acquisitions since being set up in 2005. (1 US dollar = 1.1272 Canadian dollars) (Reporting By Thomas Escritt; Editing by Greg Mahlich)
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