ING announced yesterday that it will rebrand to Voya in the next 20-24 months. As part of its bailout package in 2008, ING was required to divest its North American holdings by the end of 2013. While ING Direct was sold to Capital One, the company was granted an extension last November to divest the retirement and investment management group.
The announcement should help ING, since some advisors and plan sponsors may have been reluctant to do business with them because of the uncertainty. This may be especially true in the larger market, where ING has a strong presence as a result of its CitiStreet acquisition.
The announcement of the new name takes ING one step closer to an IPO as opposed to a potential sale to a competitor, which most experts always thought was unlikely. The expected proceeds of $600 million from the IPO is less than the rumored price that ING paid for CitiStreet, but the company will exit the IPO process as a top-three provider as measured by DC assets, plans and participants — with a strong presence in the small and mega markets and well positioned to descend on the mid-market. It also runs one of the largest MEPs (in cooperation with the American Bar Association), and works with a number of 403(b) and 457 plans.
Mutually owned providers like MassMutual may argue that their structure is better for the DC market, which requires patience and investments, but publicly traded companies have access to relatively cheap capital.
The ING announcement and pending IPO is another major move by a Hartford-based insurance company, following the sale of The Hartford’s retirement division to MassMutual last year.
