Principal says that, based on current exchange rates, the purchase price for 100 percent of the company is about $1.51 billion, subject to adjustments for pre-closing dividends. Pending Chilean regulatory approval and the fulfillment of other conditions, the transaction is expected to close in Q1 2013 and be accretive immediately to EPS and ROE.
Cuprum, a pension manager in Chile, has about $32.1 billion of assets under management, Principal said. 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 class, stable economic growth and robust growth in voluntary pension products.
The agreement requires Empresas Penta S.A. and Inversiones Banpenta Limitada to sell its 63 percent ownership in Cuprum, pursuant to a public tender offer that also will include the remaining 37 percent of publicly traded shares. This action, combined with its current business in Brazil, Chile and Mexico, will give Principal a larger presence in faster growing emerging markets.
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