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Filed by ReliaStar Financial Corp.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: ReliaStar Financial Corp.
Commission File No. 0-10640
Amsterdam, 1 May 2000
ING Group makes major acquisition of ReliaStar for USD 6.1 billion
Major step forward in US strategy
Highlights
o ReliaStar, the 8th largest publicly held life insurance company in the
United States, is an excellent addition to ING's present U.S. operations in
terms of product range, distribution network, integrated financial services
platform and innovative marketing concepts.
o ING substantially increases the scale of its U.S. insurance and mutual
funds operations:
o ING's overall market position in the United States will go from 19th
to 8th in terms of total life and annuity premium.
o Assets under management increase from USD 39 billion to USD 75 billion
pro forma 1999.
o Premium income increases from USD 8.2 billion to USD 12.4 billion pro
forma 1999.
o Consideration of USD 54 per share ReliaStar in cash.
o Total value of the transaction approximately USD 6.1 billion. This includes
USD 1 billion of existing ReliaStar debt to be assumed by ING.
o Transaction to be financed internally.
o Immediate contribution - assuming consolidation as of late September 2000 -
to net profit per share ING Group in 2000: EUR 0.10.
o Expected positive contribution to net profit per share ING Group in 2001:
EUR 0.34.
o Expected synergy 2001 (after taxation) USD 25 million increasing to USD 65
million in 2005. In 2005 this consists of roughly 30% in revenues and 70%
in cost synergies.
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Press conference today at 10.30 hours CET hosted by Godfried van der Lugt,
chairman Executive Board ING Group; Ewald Kist, vice chairman Executive Board
ING Group; Cees Maas, Executive Board member and CFO ING Group; Fred Hubbell,
chairman ING Americas; and John Turner, chairman and CEO of ReliaStar; in the
ING Tower, Strawinskylaan 2631, Amsterdam.
If you cannot attend the press conference, Ewald Kist, vice chairman
Executive Board ING Group, Fred Hubbell, chairman ING Americas, and John Turner,
chairman and CEO of ReliaStar, will be available to answer media questions
during a teleconference at 9.30 a.m. CST. Media in the U.S. can participate in
this conference by calling 1 (800) 933-4955. Media outside the U.S. can call +1
334 260 0508. After dialling you need the following information: leader: Kevin
Cook, password: ING.
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Acquisition agreement with ReliaStar
ING Group is pleased to announce to have reached a definitive agreement with
ReliaStar Financial Corp. (NYSE: RLR) to acquire ReliaStar, a leading U.S. life
insurer and provider of integrated financial services. With this agreement ING
advances its stated strategy of substantially expanding its presence in the
United States. The agreement values ReliaStar at USD 54 per share with a value
of approximately USD 5.1 billion and USD 1 billion in debt. The transaction is
expected to close late in the 3rd quarter of 2000, and is subject to regulatory
and ReliaStar shareholder approval.
ReliaStar will continue its operations as part of ING Americas under the name
ING [lion] ReliaStar and retain current management. ReliaStar's Chairman and CEO
John Turner will become a member of the Executive Committee ING Americas and
become Vice Chairman of the Americas region. Bob Salipante, President and COO of
ReliaStar, has been named President and CEO of the U.S. life insurance
operations.
Strategic importance for ING
ReliaStar is a strategic addition to ING's present U.S. operations in terms of
product range, distribution network, integrated financial services platform and
innovative marketing concepts. ReliaStar has an excellent management team that
will be an important addition to ING management. Senior management of ReliaStar
will participate in the general management of the Americas region.
"This transaction marks another step ING has taken towards achieving our goal of
substantially increasing our presence in the United States and furthering our
position as a financial services leader in North America," said Godfried van der
Lugt, chairman of the Executive Board of ING Group. "In ReliaStar, we've found a
partner that is highly respected in the financial services industry. Besides
offering additional scale ReliaStar brings complementary products, services,
distribution channels and management to ING."
"We did significant research on the strategic alternatives available to
ReliaStar, and we are pleased to have found a partner that achieves our goal of
delivering maximum value for our shareholders while leveraging the strengths of
our operations and employees," said John G. Turner, ReliaStar chairman and CEO.
"Given the complementary nature of our operations and ING's strategy to be a
leader in the U.S. market, we are extremely optimistic about the opportunities
to grow our operations across the country, expand the products and services that
we offer our distributors and customers, and provide extensive career
opportunities for our employees. It's rare to see a transaction that furthers
the interests of so many stakeholders."
Product range
Total assets under management in U.S. operations would approximately double from
USD 39 billion to USD 75 billion. Also with this acquisition, ING greatly
strengthens its product range in the United States. For example, ReliaStar
contributes a strong term insurance and fund management business. For many
market segments ING gains considerable additional scale and increased market
share. For universal life products ING rank improves from 6th to 3rd in the US
market.
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ReliaStar's life & annuity division in 1999 adds 80% to ING's individual life
sales, 42% to ING's fixed annuity sales and 14% to ING's variable annuity sales.
In total, ReliaStar life & annuity adds 22% (USD 1.03 billion) to ING's life &
annuity sales in 1999.
In addition, ReliaStar brings a fast growing mutual funds business, Pilgrim
Funds, which ranks among the top ten in first quarter 2000 sales with more than
USD 2.3 billion. The combination of ING's and ReliaStar's investment management
operation is complementary.
Besides offering additional scale for universal life and annuity products,
ReliaStar has a leading position in the 403 (b) tax-sheltered annuity market
place. Equally important, ReliaStar brings a strong set of worksite businesses,
including group life insurance and other employee benefit products, 401 (k)
plans and payroll deduction individual life insurance. ReliaStar is the 6th
largest provider in new group term life sales and has 4,000 employer
relationships with 4.4 million employees. 401 (k) plan assets total USD 3
billion. In total, ReliaStar's worksite financial services achieved USD 728
million in sales in 1999.
Distribution
ING has the 5th largest independent broker/dealer network in the U.S.-based on
registered representatives consisting of 3,800 independent brokers. Combined
with the 4,000 registered representatives of ReliaStar, ING will have the
largest independent broker/dealer network in the US.
ReliaStar has several e-commerce initiatives including an on-line education
website called ihatefinancialplanning.com. With this website ReliaStar is
leveraging its financial education and relationship-building expertise. This
expertise is also being used to develop a very interactive and dynamic internet
application to wholesale their products to independent broker/dealers. On-line
education, along with virtual sales support, provides ReliaStar with an
effective way to build and sustain long-term relationships with its customers.
Integrated financial services
ReliaStar has placed a significant emphasis on the use of multiple distribution
channels, which it has developed into a successful cross-selling model
accounting for 27% in 1999 of total insurance sales. ReliaStar's vision of
integrated financial services is highly compatible with that of ING. Current ING
distribution channels, including independent and career agents, financial
planners and financial institutions will combine well with ReliaStar's
distribution channels resulting in considerably increased scale and cross
selling opportunities. These distribution channels servicing retail consumers
will be augmented by ReliaStar platforms in worksite and affinity marketing,
bank marketing and direct marketing together with an innovative education-based
marketing system that spans its entire enterprise.
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Innovative marketing concepts
ReliaStar's financial education program results in higher average sales and
better product retention, because of increased consumer awareness at time of
purchase. ReliaStar obtained excellent results from its innovative cross selling
programs, which should greatly benefit from the combined product range and
distribution channels of the two companies.
Transaction details
The transaction requires the approval of regulatory authorities in the United
States and other jurisdictions and the shareholders of ReliaStar. The
consideration will be 100% cash other than ING Group ADR's exchanged for
ReliaStar shares held by ReliaStar's ESOP (Employee Stock Ownership Program). In
addition to the USD 5.1 billion paid for ReliaStar's outstanding shares, ING
will be assuming USD 1 billion of ReliaStar's outstanding debt, for a total
transaction value of USD 6.1 billion. The transaction will be financed
internally. In connection with the merger agreement, ReliaStar has granted ING
an option to acquire (under certain defined circumstances) approximately 9
million ReliaStar shares.
ReliaStar Profile
ReliaStar is a holding company based in Minneapolis (Minnesota) whose
subsidiaries offer individuals and corporate clients life insurance, annuities,
employee benefit products, reinsurance, mutual funds and bank products.
ReliaStar is the 8th largest publicly held life insurance company in the United
States based on 1999 revenues. It was founded in 1885 and now employs over 3,800
people.
During the last 5 years, assets under management have more than doubled from
USD 15.8 billion to USD 38.4 billion as of March 31, 2000. With Pilgrim Funds
ReliaStar brings an attractive retail mutual fund platform, with USD 17 billion
in mutual fund assets under management as of March 31, 2000. Sales of insurance
products have shown a compound growth rate of 15.9% in 1999. ReliaStar's
reported return on equity has averaged 14.9% over the past five years.
ING Group profile
ING Group is a global financial institution which is active in the field of
insurance, banking and asset management in more than 60 countries, with almost
90,000 employees. ING seeks to provide a full range of integrated financial
services to private, corporate and institutional clients through a variety of
distribution channels, giving them the freedom to choose the option which best
suits their individual needs. ING Group is Europe's 5th largest financial
institution in terms of market capitalisation.
This notice does not constitute an offer by ING Groep N.V. on any of its
securities for sale.
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Press enquiries: ING Group: Manel Vrijenhoek, + 31 20 541 54 33
ReliaStar: Ruth Weber Kelley, + 1 612 372 5628
Investor relations: ING Group: Herman S. Geuze, + 31 20 541 5462
ReliaStar: Karin Glasgow, + 1 612 342 3979
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For more information on:
ING Group: www.ing.com
ING Americas: www.ingamericas.com
ReliaStar: www.reliastar.com
Certain of the statements contained herein, including with respect to
anticipated results for the year ending 31 December 2000 and subsequent, are
forward-looking statements of future expectations that are based on management's
current views and assumptions. Actual results, performance or events may differ
materially from those in such forward-looking statements due to, without
limitation: general economic and market conditions in the Netherlands, U.S. and
elsewhere; the frequency and severity of insured loss events; mortality,
morbidity and persistency levels and trends; interest rate and currency exchange
rate levels; changes in laws and regulations; and general competitive factors,
in each case on a global, regional and/or national basis.
Certain information concerning participants
ReliaStar Financial Corp. (The "Company") and certain other persons named below
may be deemed to be participants in the solicitation in the of proxies of the
Company's stockholders to approve the merger. The participants in this
solicitation may include the directors of the Company and certain executive
officers of the Company:
As of the date of this communication, none of the foregoing participants
individually beneficially owns in excess of 1% of the Company's common stock or
in the aggregate in excess of 3% of the Company's common stock. Except as
disclosed above, to the knowledge of the Company, none of the directors or
executive officers of the Company or the employees or other representatives of
the Company named above has any interest, direct or indirect, by security
holdings or otherwise, in the Company.
All stockholders should read the proxy statement concerning the merger that will
be filed with the SEC and mailed to stockholders. The proxy statement will
contain important information that stockholders should consider before making
any decision regarding the merger. You will be able to obtain the proxy
statement, as well as other filings containing information about the Company and
[ING], without charge, at the SEC's Internet site (http://www.sec.gov). Copies
of the proxy statement and the SEC filings that will be incorporated by
reference in the proxy statement can also be obtained, without charge, from the
Corporate Secretary of the appropriate company.
