Principal Financial Group Completes Cuprum Acquisition, the Premier Chilean AFP Pension Company
DES MOINES, Iowa--(BUSINESS WIRE)-- Principal Financial Group, Inc. (NYS: PFG) , a global investment management leader, today announced that the AFP Cuprum S.A. (Cuprum) acquisition is complete. On Oct. 8, 2012, The Principal® announced a definitive agreement to acquire Cuprum, which required Empresas Penta S.A. and Inversiones Banpenta Limitada to sell their 63 percent ownership in Cuprum pursuant to a public tender offer that also included the remaining 37 percent of publicly traded shares, which has been completed giving The Principal a 90.4 percent ownership stake in Cuprum. The Principal intends to acquire the remaining shares after completion for a total purchase price of USD$1.5 billion less assumed debt.
The transaction was immediately accretive and is expected by the company to benefit 2013 EPS by approximately 12 cents and 23 cents in full year 2014. The transaction is estimated to improve total company ROE by 45 bps in 2013 and 75 bps in 2014.
Cuprum, a leading pension manager in Chile and among the fastest growing, has approximately USD$32.7 billion of assets under management1. Cuprum products include mandatory employee-funded pension plans, voluntary pension products (APV), and other long-term savings products. The Chilean pension market has consistently grown at double-digit rates driven by a large and expanding middle and affluent market, stable economic growth and robust growth in voluntary pension products.
"The combination of Cuprum and The Principal provides customers in Chile with an unparalleled array of retirement savings, asset management and retirement income solutions," said Luis Valdes, president and CEO of Principal International. "Cuprum already has a leading pension brand in Chile, and now adds the backing of a global retirement and investment management leader in The Principal."
According to Larry Zimpleman, chairman, president and CEO at The Principal, "the Cuprum acquisition further strengthens our competitive position in one of the most attractive emerging retirement and long-term savings markets. Cuprum represents the sixth such transaction for The Principal in the past two years and adds meaningfully to our fee-based earnings, giving us continued financial flexibility."
The Principal Financial Group's strategy of Investment Management Plus helps customers around the world ensure their financial future by building retirement and long-term savings, investing to grow their assets, and insuring their income.
Forward looking and cautionary statements
This press release contains forward-looking statements, including, without limitation, statements as to operating earnings, net income available to common stockholders, net cash flows, realized and unrealized gains and losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and opinions. The company does not undertake to update these statements, which are based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their effects on the company may not be those anticipated, and actual results may differ materially from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute to such material differences are discussed in the company's annual report on Form 10-K for the year ended Dec. 31, 2011, and in the company's quarterly report on Form 10-Q for the quarter ended Sept.30, 2012, filed by the company with the Securities and Exchange Commission, as updated or supplemented from time to time in subsequent filings. These risks and uncertainties include, without limitation: adverse capital and credit market conditions may significantly affect the company's ability to meet liquidity needs, access to capital and cost of capital; continued difficult conditions in the global capital markets and the economy generally; continued volatility or further declines in the equity markets; changes in interest rates or credit spreads; the company's investment portfolio is subject to several risks that may diminish the value of its invested assets and the investment returns credited to customers; the company's valuation of securities may include methodologies, estimations and assumptions that are subject to differing interpretations; the determination of the amount of allowances and impairments taken on the company's investments requires estimations and assumptions that are subject to differing interpretations; gross unrealized losses may be realized or result in future impairments; competition from companies that may have greater financial resources, broader arrays of products, higher ratings and stronger financial performance; a downgrade in the company's financial strength or credit ratings; inability to attract and retain sales representatives and develop new distribution sources; international business risks; the company's actual experience could differ significantly from its pricing and reserving assumptions; the company's ability to pay stockholder dividends and meet its obligations may be constrained by the limitations on dividends or distributions Iowa insurance laws impose on Principal Life; the pattern of amortizing the company's DPAC and other actuarial balances on its universal life-type insurance contracts, participating life insurance policies and certain investment contracts may change; the company may need to fund deficiencies in its "Closed Block" assets that support participating ordinary life insurance policies that had a dividend scale in force at the time of Principal Life's 1998 conversion into a stock life insurance company; the company's reinsurers could default on their obligations or increase their rates; risks arising from acquisitions of businesses; changes in laws, regulations or accounting standards; a computer system failure or security breach could disrupt the company's business, and damage its reputation; results of litigation and regulatory investigations; from time to time the company may become subject to tax audits, tax litigation or similar proceedings, and as a result it may owe additional taxes, interest and penalties in amounts that may be material; fluctuations in foreign currency exchange rates; and applicable laws and the company's certificate of incorporation and by-laws may discourage takeovers and business combinations that some stockholders might consider in their best interests.
About the Principal Financial Group
The Principal Financial Group® (The Principal ®)2 is a global investment management leader offering retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $403.0 billion in assets under management3 and serves some 18.3 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
About AFP Cuprum
AFP Cuprum is a publicly traded, leading Chilean pension company with US$32.7 billion in assets under management. Their products include mandatory defined contribution pensions (AFP), voluntary pensions, non-tax preferenced voluntary savings (CAV) and account drawdown at retirement (RP). Based in Santiago, Chile, the company has more than 1,100 employees and distributes products from 32 branches in Chile, with 3 branches located in Santiago.
1 As of Nov. 30, 2012
2 "The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
3 As of Dec.31, 2012
KEYWORDS: United States North America South America Chile Iowa
The article Principal Financial Group Completes Cuprum Acquisition, the Premier Chilean AFP Pension Company originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.