GRUPO SURA BUYS MOST OF ING LATAM OPERATIONS

Dutch Bancassurer ING Groep NV said on Monday it would sell most of its Latin American operations to Colombia's GrupoSura (SIS.CN) for 2.6 billion euros ($3.7 billion) in the largest-ever acquisition abroad by a Colombian company.

The sale of the Latin American insurance and investment management business by ING (ING.AS)(ING.N) would pave the way for the sale of its U.S., European and Asian operations, which are worth about 18 billion to 19 billion euros.

Reuters exclusively reported in March that ING had started the sale of its Latin American arm. ING had agreed to split its bank and insurance operations in return for approval for 10 billion euros of state aid in 2008 and has said it plans to repay the Dutch state in full by May. [ID:nLDE7292GW]

"We continue to prepare our remaining insurance and investment management businesses for our base case of two IPOs -- one for the U.S. businesses and one for the European and Asian businesses -- so that we will be ready to proceed when markets are favorable," ING CEO Jan Hommen said.

Some analysts say ING might fetch a higher price for its insurance assets through trade sales rather than initial public offerings.

"ING could also decide to sell other insurance and investment management operations, in particular those in Asia, to a rival instead of listing them," said Theodoor Gilissen analyst Tom Muller. "We know several parties want to expand in Asia."

FINANCING THE ING PURCHASE

The sale announced on Monday involves ING's insurance, pension, savings and investment management operations in Chile, Colombia, Mexico, Uruguay, and Peru for 2.6 billion euros in cash. GrupoSura would also take on 65 million euros of debt.

That excludes ING's 36 percent stake in Brazil's Sul America SA (SULA3.SA), which would be divested separately.

ING shares closed down 2.5 percent at 7.8830 euros, while GrupoSura's shares rose 2.2 percent.

GrupoSura, or Grupo de Inversiones Suramericana, is a financial holding firm listed on the Colombian stock exchange and has investments in Colombia's biggest insurer and bank.

The ING deal would be the largest acquisition abroad by a Colombian company. It would amount to more than half of total investment abroad by Colombian companies in 2010.

Colombian direct investment abroad zoomed 500 percent to $6.5 billion last year from 2007, surpassing Brazil and Mexico, the region's two biggest economies, as a share of the economy. [ID:nNN1E76A0J]

GrupoSura said it would finance the purchase with its own resources, Colombian or international bank loans and share issuances, probably toward October and November.

The preferential shares would be an "important" amount and could be sold in Colombia as well as the United States, Europe or the MILA exchange that integrates the bourses of Peru, Chile and Colombia, GrupoSura President David Bojanini said.

UBS Investment Bank said that it was advising GrupoSura on a $1.65 billion bridge loan, $511 million monetization of preferred shares and hedging transactions. It gave no other details.

ING said the deal would create a Latin American savings and investments group with about $120 billion in assets under management and operations in eight countries.

The businesses have assets under management of 49 billion euros and earned 192 million euros in net income in 2010 on roughly 670 million euros in revenue on an International Financial Reporting Standards basis.

The deal is valued at 16 times estimated 2011 earnings, ING said, and at 1.8 times book value on an IFRS basis. It said it would make a 1 billion euro profit on the deal, which is expected to close by year-end. (Editing by Sara Webb and Gerald E. McCormick) ($1 = 0.696 Euros)