EC finds Hungary violated merger rules with VIG-Aegon veto
Finance Minister: State acquires stakes in insurers Aegon, Union
The investment is “hugely advantageous” for Hungary, Varga said in a post on Facebook, noting that Aegon and Union hold a combined 20 percent share of Hungary’s insurance market and have a combined annual revenue of 240 billion forints (EUR 671.8m).
The acquisition serves to increase public wealth and to return strategic assets to state ownership, the minister said.
He added that between 2002 and 2010, the left-liberal governments had sold off a significant chunk of state assets, privatising roughly 190 companies. The Fidesz-led government put an end to the sale of state assets, he said, adding that the previous system had been replaced by thoughtful policies.
“Thanks to this, by 2020, the value of state assets increased to 20,000 billion forints from 11,000 billion in 2010,” Varga said.
EC finds Hungary violated merger rules with VIG-Aegon veto
The EC said that under Article 21 of the EU Merger Regulation (EUMR), it had exclusive competence to examine concentrations with an EU dimension and member states “may only take measures to protect legitimate interests under certain conditions”.
VIG announced in November 2020 that it agreed to acquire the businesses of Aegon in Hungary, Poland, Romania and Turkey for a price of 830 million euros, a deal that would have made VIG market leader in Hungary. In April 2021, VIG said its acquisition of Aegon’s business in Hungary was denied by the interior ministry.
Under its enhanced powers aimed at managing the crisis caused by the pandemic, Hungary’s government has been equipped with legal tools to block foreign takeovers of domestic companies.
In October 2021 the EC opened an investigation in relation to the Hungarian decision. Following its initial assessment, in January 2022, the commission informed Hungary of its preliminary conclusion that the veto violated Article 21 of the EUMR.
“Following its investigation, and having heard the arguments of the Hungarian authorities, the Commission had reasonable doubts as to whether the veto genuinely aimed to protect Hungary’s legitimate interests within the meaning of the EUMR,” the EC said. “In particular, it is unclear how the acquisition by VIG of AEGON’s Hungarian assets would pose a threat to a fundamental interest of society.”
The EC also found “that veto restricted VIG’s right to engage in a cross-border transaction, and the Hungarian authorities failed to show that the measure was justified, suitable and proportionate”.
The EC has ordered Hungary to withdraw its veto by March 18. If Hungary fails to comply, the commission may decide to launch an infringement procedure.
The Hungarian state signed a contract on Monday to acquire a 45 percent stake in the local businesses of VIG and Aegon, Finance Minister Mihaly Varga said on Facebook. The acquisition serves to increase public wealth and to return strategic assets to state ownership, the minister said.
