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Headfak-ING

|Includes:AIG, AXA, Allianz SE (ADR) (AZ), ING, MET, PUK

It seeemed a little too coincidental that two stories should appear yesterday on Bloomberg in such rapid succession.  First, it was reported that AXA and Allianz (as I hinted a week or so back, probably too coyly) should be on the hunt for acquisitions after Prudential PLC's announced bid for AIG's crown jewel AIA.  I had, admittedly, thought that Allianz would be the buyer.

Within an hour, ING got a story out on Bloomberg that it would be selling all of its insurance units together in an IPO.  The Dutch insurer, through its Central European chief, took particular care to point out that its Central and East European operations in particular, would not be offered up for sale.

This sequence of events is worthy of note for a couple of reasons.  While ING is not filling a capital hole the size of AIG's, its plan is very much to divest the insurance arm.  While its October 2009 "Accelerating Back to the Basics" plan, released after its forced decision to separate banking and insurance, shows that the same senior management team will oversea, CEO Jan Hommen came up the ranks at Alcoa before taking the helm of ING. He doesn't have a deep insurance background, and there's no reason to believe he wil be obstinate about maintaining control of the insurance arm.

With regard to the Central and Eastern European [CEE] component of ING's business, ING isn't a top tier player in the region like Allianz, Generali, and the Vienna Insurance Group are.  ING's stated strategy in the CEE region is to "Invest in the franchise to become more efficient", which surely leaves no one shaking in their boots.

AIG stated its plan to IPO AIA as a way to make it clear that the franchise remained on the block. My guess is that ING is doing the same thing.  If a bidder comes along with the right bid, it will be accepted.


Disclosure: Indices only

Disclosure: Indices only

Disclosure: FUSEX, FSIIX, FSTMX, FECAX

Stocks: AZ, AXA, ING, AIG, MET, PUK