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ING Gets Extension on Sale of U.S. Holdings

The Wall Street Journal has reported that ING has been given more time (subscription required) to sell its U.S. groups as part of a deal worked out with the European Commission, the European Union's executive arm.

When ING took the Dutch equivalent of TARP money in 2008, they agreed to divest some of their units, including their U.S. holdings, which include their record keeping division. The 2008 deal called for complete divestiture by the end of 2013, but the out-of-court settlement allows for ING to divest more than 50% of its Asian operations and at least 25% of its U.S. insurance business with an IPO filed this month by the U.S.-based record keeping and investment group.

ING’s business is like a barbell — heavy in the small and large markets and in need of beefing up in the mid-market. The business was created via a series of acquisitions, starting with Aetna’s retirement business and Reliastar (Bill Chetney’s old firm) in 2001. Then in 2008 ING bought CitiStreet, which was a consolidation of Smith Barney, Copeland and State Street, with the latter serving mostly mega 401(k) and 457 plans. (See our DC Provider Consolidation List.)

ING is well positioned as a top-three record keeper measured by assets, plans or participants serving 401(k), 403(b) and 457 plans across multiple markets, as well as individual investors, selling both direct and through advisors. They also run the largest MEP in conjunction with the American Bar Association.

What will the IPO and the extension of the deadline mean to advisors? An IPO will mean more capital to invest but also greater scrutiny. It’s also possible — but unlikely — that a private equity firm or competitor might buy ING, which would have different repercussions. Either way, the platform should stay intact. And when the transaction occurs, it should be only minimally disruptive.

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