ING to Sell Capital One Stake for $3B

by Christopher Freeburn | September 5, 2012 10:15 am

ING to Sell Capital One Stake for $3B

ING Groep (NYSE:ING[1]) will sell its stake[2] in Capital One (NYSE:COF[3]) for about $3 billion.

The Dutch banking giant acquired the 9% stake in Capital One in February as part of its $9 billion sale of ING Direct USA to the U.S. bank. The purchase of ING Direct vaulted Capital One past rivals TD Bank (NYSE:TD[4]) and PNC (NYSE:PNC[5]) to become the fifth largest bank in the U.S. with more than $200 billion in deposits, the New York Times noted.

In addition to cash payments, ING received $2.8 billion in Capital One shares under the purchase agreement. It says that it will realize a profit of $378 million once its sells its 54 million Capital One shares.

Shares of ING Group rose almost 2% in Wednesday morning trading in New York, while Capital One shares dipped by about 1%.

Morgan Stanley (NYSE:MS[6]), Citigroup (NYSE:C[7]) and Bank of America (NYSE:BAC[8]) will serve as bookrunners in the sale of the Capital One shares, which is expected to close next week.

ING is looking to boost its Tier 1 ratio to 11.9%. The Dutch group has been under pressure from European regulators to increase its reserves against potential financial turmoil. The bank received $12.5 billion in support from the Dutch government in 2008.

In order to bolster its reserves, and limited exposure, ING has sold a number of assets, including its online banking operations in the U.S. and Canada and its insurance unit in Asia.

Endnotes:
  1. ING: http://studio-5.financialcontent.com/investplace/quote?Symbol=ING
  2. will sell its stake: http://dealbook.nytimes.com/2012/09/05/ing-to-sell-stake-in-capital-one/
  3. COF: http://studio-5.financialcontent.com/investplace/quote?Symbol=COF
  4. TD: http://studio-5.financialcontent.com/investplace/quote?Symbol=TD
  5. PNC: http://studio-5.financialcontent.com/investplace/quote?Symbol=PNC
  6. MS: http://studio-5.financialcontent.com/investplace/quote?Symbol=MS
  7. C: http://studio-5.financialcontent.com/investplace/quote?Symbol=C
  8. BAC: http://studio-5.financialcontent.com/investplace/quote?Symbol=BAC

Source URL: http://investorplace.com/2012/09/ing-to-sell-capital-one-stake-for-3b/
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