Goldman Sachs said on Thursday it will acquire Dutch insurer NN Group’s asset management arm for about 1.7 billion euros ($1.98 billion) in the greatest acquisition by the U.S. Company since David Solomon became CEO in 2018.
The arrangement is important for Solomon’s technique to make the bank’s income stream less dependent on profit from trading and advisory services. The Wall Street firm needs to beef up in specialties like wealth management and grow its essence in regions outside the US.
“This acquisition permits us to speed up our development system and expand our asset management platform,” Solomon said in an explanation.
NNIP, or NN Investment Partners, has $335 billion in resources under management, and the acquisition will double the absolute that Goldman Sachs oversees in Europe to more than $600 billion.
Goldman said NNIP’s 900 employees will join GS and the Netherlands will turn into “a critical area” in its European business.
Goldman is the furthest down the line major financial firm to build up tasks in the Netherlands in the wake of Britain’s exit from the European Union; however, NNIP is situated in The Hague, as opposed to Amsterdam, the country’s fundamental financial center.
As a component of the arrangement, NN Group the Netherlands’ greatest insurer has resolved to leave its $190 billion arrangement of insurance resources under NNIP management after it joins Goldman.
“The combined investment skill and scale will improve the services offering to NN Investment Partners’ customers, including NN Group,” said NN CEO David Knibbe.
NN said the sale of NNIP will further develop its Solvency II ratio by 17 percentage points, from 209% toward the end of June, and proceeds would be utilized for acquisitions or extra returns to investors. The proportion is a measure of how much additional cash it needs to go about as a pad should markets fall.
“Given the company’s now solid capital position which is adequate to subsidize its organic growth opportunities, and the absence of clear M&A target, the potential for critical overabundance capital returns in the coming year(s) is obvious,” said Credit Suisse in a remark on the arrangement. It said the value Goldman paid was higher than the 1.5 billion euros it had anticipated.
Offers in NN Group fell 1.1% to 43.77 by 0844 GMT, yet are up 23% in the year to date.
NNIP had additionally drawn in interest from various different backup plans and resource directors, reporters revealed in June, with Germany’s DWS seen as a leader.
“While we saw potential here for a drawn-out development organization beyond the management of existing resources … the vendor’s need was to amplify the immediate price tag,” said a DWS source close to the transaction.
