ING Group is buying benefits servicing business CitiStreet from State Street and Citigroup for US$900 million in cash.
The purchase—combined with its own operations—will make ING the second-largest defined contribution manager in the United States based on plan participants, with more than 14 million plan participants and the third-largest DC manager based on $351 billion in assets under management and assets under administration.
“This acquisition significantly expands our existing footprint in our retirement services businesses in the U.S. and will help drive long-term growth in the U.S. retirement savings marketplace,” says ING Insurance Americas president Tom McInerney.
State Street expects the sale will allow it to continue to build on its global franchise focused on serving institutional investors while Citigroup, which has suffered as a result of the global credit crunch, says selling CitiStreet is consistent with its focus on divesting non-core assets and strategically re-allocating capital throughout the organization.
Related Story |
Both companies currently own a 50/50 stake in the joint venture, which was formed in 2000.
The Quincy, Mass-based firm provides a range of recordkeeping and administrative services to more than 16,000 plans and 12 million participants. CitiStreet has more than $262 billion in assets under administration as of March 31, 2008 and approximately 3,700 employees.
The deal is expected to close in the third quarter of this year.
To comment on this story, email craig.sebastiano@rci.rogers.com.