Good morning, ladies and gentlemen, and welcome again in our building at ASR. We are very happy to see so many people in the room. This supports the importance of the topics at hand. I'd like to open our extraordinary general meeting and go through a couple of formalities with you at the start. This meeting is being offered in a hybrid form to enable as many shareholders as possible to participate. No one has taken up the option to attend only virtually. On behalf of ASR Nederland, the following people are participating in this meeting. The full Supervisory Board and Sonja Barendregt, the Chairman of the Audit and Risk Committee, Herman Hazewinkel, the Vice Chair of the Supervisory Board. We also have Gisella van Vollenhoven, the Chair of the Remuneration Committee present. Gerard van Olphen, and I'm the Chair of the Supervisory Board, Joop Wijn.
We see the full board, Jos Baeten, Chair of the Executive Board, Ingrid de Swart, the COO/CTO, and Ewout Hollegien, the CFO. I would also like to warmly welcome the representatives of the Works Council. Glad to have you here. There are also media representatives present. Welcome to you all at this meeting. In connection with agenda item four, one of the two proposed candidates for the supervisory board, Mrs. Daniëlle Jansen Heijtmájer , is present. The second candidate for the supervisory board, Mr. Lard Friese, cannot be present due to the EGM taking place at 2:00 this afternoon of the Aegon Group. He will therefore join the meeting here via a video link during the discussion of agenda item four. We have our Notary Public, Paul van der Bijl, who is present to oversee the proper voting procedure.
He is also proxy for shareholders who have already cast their votes by proxy. The agenda items to be voted on are agenda item two. This pertains to the approval of the acquisition of Aegon Nederland and in connection there with certain authorizations for the Executive Board. Agenda item four is a voting item, the composition of the Supervisory Board. Voting will be done electronically. I'll get back to that later. I note that the notice of the meeting was given in accordance with the law and the articles of association. I also note that the meeting can take valid resolutions and decisions. I also note that shareholders have not submitted any proposals for consideration today. A couple of housekeeping announcements. First, kindly put your cell phone on silent if you haven't already done so.
This meeting can be followed via a webcast in Dutch and English on our website, and you can also review it at a later point in time. After the meeting, in our lounge area, we will make a lunch available to you if you have questions, not as a shareholder, but as a customer, you can then always address one of our hostesses and they will put you in touch with the right person after the meeting. This was agenda item one. We'll continue with agenda item two, which is the proposal to approve the acquisition of Aegon Nederland N.V. and approval to indeed purchase the shares. This meeting is entirely dedicated to this proposed acquisition. In the documents, you've been able to read the main elements of this transaction. As agenda item two, we will first discuss the acquisition itself.
In agenda items three and four, we will then discuss some of the agreements that are part of the transaction, the conditional reappointment of Jos Baeten, and also the conditional appointment of two new members of the supervisory board. These are conditions for the closing of the acquisition. The acquisition itself requires the approval of the general meeting of shareholders, both in respect of the acquisition and in respect of the appointments I just mentioned. As you've been able to read in the documents, the Works Council has advised positively on the transaction. The Works Council will not explain this further at this general meeting. You also know that the supervisory board was closely involved in the process that led to the transaction currently before us. The supervisory board has also given its approval and strongly recommends voting in favor of this resolution.
Before we put it to the vote, Jos Baeten, on behalf of the Executive Board, will explain the transaction in more detail. Jos?
I do this with quite some pride. We achieved this together with our new colleagues from Aegon, thus in the Netherlands, a beautiful leading insurance company will appear. A leading insurance company, those who have attended our AGMs more frequently know that we lead our company from the four important stakeholders. A leading insurance company which serves the four categories of stakeholders. I will address this in a moment. A leading insurance company also that from the outset will have a strong and healthy balance sheet. This has been a parameter of management for a long time, this is important for the policy holders as well. Therefore, by means of this transaction, we'll have a leading insurance company with a strong balance sheet acting in the interest of the four stakeholders. Let me first dwell on the four stakeholders for a moment.
First of all, our customers. Internally always say that customers give us our daily bread, and without them we have no raison d'être. Why do we think and believe that this transaction serves the interests of our clients? First of all, we'll have a large, beautiful Dutch company with a strong balance sheet, a company that maintains focus on the Netherlands. A company that in the future, in terms of products that we have on the shelf, to say it simply, will have a broader range of products, meaning even more clients will feel attracted to the new ASR, the NewCo, and also a company, as I said before, with a very strong balance sheet. The second stakeholder we see as important are the employees. Without our employees, we cannot serve our customers.
Once again, for them, this is a beautiful transaction, and this shows in their reactions within ASR and within Aegon. 'Cause our employees see that this is going to be a wonderful combination. After the completion of the integration, this means that there will be a large Dutch company with even more opportunities for personal development and for growth. Of course, we also see the concerns of employees because integration always brings the fear, what this may mean for someone's job.
The way we see it at the moment is the following: looking at the labor market, which is extremely tight at the moment, looking at the number of job offers that we have within Aegon Nederland and the number of job offers within ASR, looking also at the afflux of staff by means of pensioning or retirement or people deciding to look for the jobs, we are not as much concerned about scaling down the number of employees, but rather our concern is how to make sure we keep sufficient qualified staff on board to make this operation a success. A third stakeholder that is really important to us, and obviously all of them are at the same level, but I have to cover them one by one, is investors or shareholders. We think that for shareholders, this is a very positive transaction.
We have a long-term management perspective, if you look at the financial value creation that is achieved by means of this transaction, you see that for shareholders, this is extraordinary transaction. If you look at the capital generation, I'll come back to this in a moment, you can see that there will be a huge step up, for the long run, this will be a beautiful deal. Add to this the fact that by means of the transaction, the fact that we will stop the share buyback for the moment, that we have compensated this immediately by means of a step up in dividends. You see that the ambition for dividend also has been increased, an annual growth of 5% to 7%. We believe that for shareholders, this transaction is attractive as well.
The fourth stakeholder we always take into account is the Dutch society. We're an old Dutch company. We celebrated 300 years of existence with this year, although it actually was back in 2020. We always try and see how we are placed with Dutch society, because we believe that if society turns away, you have no reason to exist as a company anymore. I understand that you can't perform well in the eyes of everyone. If you look at the positioning of ASR, particularly in the field of sustainability, we dare declare that with the future 25% market share, one of every four customers is a client of a company really serving sustainability.
In the new structure, we'll have the possibility to make an even greater impact in making the Netherlands more and more sustainable, and also our ambitions look towards the rest of the world. We believe that for all four stakeholders, this is a transaction that benefits the short-term, but also particularly the long-term interest. Let me turn to the next slide, please. ASR for years has had a strategy. I believe it's worthwhile to see why this is not just a transaction we carried out because we had the opportunity, but that this is a transaction that matches the long-term strategy we use. Illustrations for this and this illustration, for instance, was used in December 2021 to present the three-year strategy. I won't talk you through every point.
Let me highlight a few features which demonstrate, in our view, why, or that demonstrate why we believe this transaction matches our strategy. First of all, we are a major non-life insurance company in the Netherlands. By means of the transaction, we add a beautiful portfolio from Aegon and will have an even stronger position in terms of non-life and in validity insurances. We have pensions. The pension landscape is going to drastically change in the Netherlands in the future years if the Senate will adopt the legislation on the shelf. We believe that insurance company will have major opportunities in the pension landscape. ASR already had a strong position as a PPI and as a DC, a pension insurance company. Now, we mainly serve the midsize and smaller companies.
If I look at the added value of Aegon through this combination, first of all, we have TKP. This is a large player in terms of administering pension funds. I also see a very strong pensions operations in PPI, but also in the large companies in the Netherlands. Combining these makes us one of the largest players in pensions in the Netherlands. That's the position one wants to have in the light of the changes coming our way in legislation. Pensions, once again, fully matches our strategy. The next point. Unfortunately, in the Netherlands, for a long time, we have seen life shrinking. Individual life insurances are no longer concluded or written down since 2006. We want to serve our customers in the best possible way, efficient possible way.
Two large books of life portfolios come together. This is important for the solvency and therefore the servicing of customers in the long run. Another important issue is distribution. We still use intermediaries for distribution. We also have direct sales. Most of our revenues are related to intermediaries. If you look at the results of the Aegon transaction, you see that two beautiful distribution companies are added to the family, meaning we cover the Netherlands very nicely, all regions, and we also have the possibility to strengthen sales and service. Sales of new insurances and serving existing customers. Capital. I mentioned it in my introduction. This combination creates an insurance company very strong balance sheet.
We indicated in the communication that the starting position is 190%, 190 solvency, we still use a standard model for calculating the solvency. That's a very strong starting position. Where can there be a negative impact of the transaction? That is the M&A strategy. We always stated that ASR wants to have organic autonomous growth, we want to have smaller and mid-size acquisitions, we want to remain a major player. Together with the supervisory board, we, as the executive board, said that the focus for the coming years is going to be gathering together, bringing together the two companies, ensuring that they become one company fast with one corporate culture. During this period, we don't want to be detracted, distracted rather by other acquisitions.
For the coming two years, we will be less active in the field of mergers and acquisitions. This is something impacted by this transaction. I think all in all that we can really defend this transaction. This was not just an opportunity, but actually something that matches our long-term strategy. Where do we find ourselves at the end of the transaction? After closure, after two companies becoming one company, we will have a company that is the largest in the Netherlands. That's never a purpose in itself, but it's a pleasant side effect in terms of validity or professional validity. If you look at the direction the pension system is taking, you see that pensions PC are a field where we have a leading position. Same applies to PPI insurances or pensions, where we have a leading position.
If you look then at the mortgages, you have two flows. Banks have short terms, so mortgages, four, five to seven or nine years, and insurance companies covering a long-term position. If you look at the position and accommodation, after closure we'll be the largest mortgage company under the insurance companies. We're number two in terms of individual life. This is the closed book of the existing portfolios in that field will be number two, and then we have pensions. DB also is where we are number two. If you look at P&C, so this is non-life, cars, fire insurance, et cetera, we are a very good number three, and we certainly see opportunities for growth there in the coming years. The financial side of the transaction. You had an opportunity to read about this.
Still, let me highlight a few features. First of all, the price that we want to pay for 100% of the Aegon Nederland shares. This is EUR 4.9 billion. When we announced the transaction, we indicated that EUR 2.2 billion will be paid in cash consideration. Given the right on the day before transaction announcements, which was EUR 2.49 billion, you see that the evaluation of the part paid in shares is EUR 2.4 billion, brings us to EUR 4.9 billion. You can calculate it better than me. By now, the cash component has gone down to EUR 2.2 billion, not because we have renegotiated with Aegon, but because Aegon said that if you issue new shares, which has been done now, we would like to have the 29.99%.
That means that they have received some additional shares, they will pay for them, and this will be deducted from the cash component agreed on initially, meaning that the cash financing amounts to EUR 2.2 billion. I'll come back to this in a moment. From the shareholder position, the following is important. What will the new combination bring them? Shareholders currently are trying to understand what the capital generation capacity of this insurance company and what is the use of this capital. Some is reinvested and some is also were paid out as a remuneration for the capital made available.
That means that the capital generation of the company's committed of ASR standalone in 2025 is about EUR 700 million, will move to EUR 1.3 billion in 2025 as a result of the combination of the companies. You see that the financial merits of the transaction from the shareholder perspectives are excellent. We always stated that we will do nothing at this company that does not generate ROI of at least 12%. The starting position of this transaction unlevered, so without taking stock of financing by debt capital, is 14%. As a result, we already have an ROI that is above 12%. You may already know that we have issued some additional capital.
Part of the transaction will be financed with debt capital, meaning that the ROI on the transaction actually is around 20% or even higher, meaning that this is a transaction we can account for financially. Dividend has been mentioned already. Let me not repeat myself, but obviously this transaction will bring synergy. When you merge two companies, you have some overlap, you have all kinds of systems in non-life, in professional invalidity. This will have to be used in integration products. Maybe the office housing will have to be made more efficient. Finally, the company also will have slightly less or fewer employees. Our problem, as I said, is not how to lose them, but how to keep them.
I believe that three days after transaction, there will be an efficiency of EUR 185 million at least. Going forward, what does this mean for ASR's profile? This is a complicated slide, let me comment on it briefly. If you look at the current distribution in revenues between life and non-life, we have 70% in non-life and 30% in life. In the new combination, there will be more balance. You'll see that 60% of revenues will be generated from non-life and 40% will be generated from life. In terms of profitability, it's the other way around at the moment. About 65% is generated by life and 35% by non-life. In the future, that will be a 70-30 ratio.
Changing therefore, in terms of revenues, the profile, the, and also profitability, for instance, if you have profits from other activities in life, it remains unchanged, meaning that for the long run, we are very happy about this transaction. Let me turn to a number of transactional terms. The arrangements we have achieved with Aegon. I won't talk you through all of them, but let me mention a few of them. First of all, what are we buying, actually? We are buying the Aegon Nederland holding, which includes all the insurance activities of Aegon Nederland. It also includes the TKP. It includes two intermediaries for distribution companies, and it also has Aegon banking or, as it is called, the Knab Bank. This is the activities we are buying. Price has been mentioned. Financing should also be mentioned.
This is the concern of shareholders. Very nice, this transaction, but how are you paying for it? Before announcing the transaction within the executive board and the supervisory board, we stated that we want to have certainty as soon as possible about transaction. On the day of announcement, we used the right you already gave us to issue up to 10% of the equity in shares, the ABB, as we call it in Dutch. This was more or less EUR 600 million of additional capital. Some weeks later, we saw an opportunity to issue some additional debt capital because Aegon Nederland is being transferred without any debt, giving us more possibilities to issue to a Tier 2 or Tier 3 debt capital. We have the possibility to withdraw EUR 1 billion from the markets.
1.6 has been now financed externally, EUR 250 million because Aegon is paying for shares, it's buying additionally. As I said before, EUR 500 million will be used from their own balance sheet. That means that we have a need for EUR 150 million, and we take an opportunistic view on this. We will see what is the best way forward. Whether it should be taken from the balance sheet, whether there should be a temporary loan from a bank, or we should issue capital, which on EUR 2 billion is no problem, this amount of EUR 150 million. Aegon also has a partnership that was agreed upon. They are a worldwide asset manager.
We are a great Dutch asset manager. We agreed that Aegon, over the coming 10 years, will do the asset management in a number of categories for us. These are not the assets we have on their own balance sheet. We want to cover them ourselves. This is about mortgages, for instance. We have made a beautiful arrangement with the Aegon Group about managing those assets. Important in such a transaction is the following, that is something the staff asked about: What about the brand? Lots of people have an emotional link with the brand. We understand this perfectly. Some people who've been working with Aegon for a long time want to know whether the brand will disappear. The fair answer is yes. In time, Aegon will disappear as an insurance brand from the Dutch market.
It will be pretty quick for non-life and professional disability. For mortgages and life, the agreement is that for the coming three years, we will be able to use the Aegon brand, which is a very strong brand presence in those market segments. We made governance agreements as well. It's customary that in such major transactions or transactions where a shareholder acquires a major position, additional arrangements are achieved. We did so with Aegon, first of all, two supervisory directors that will join the supervisory board after closing of the transaction. You are about to vote on this. Also we have a number of governance rights that are specifically issued. These are not rights as a shareholder, but the rights that are related to the membership of the supervisory board. We thought these demands were reasonable.
Looking at the existing rights, you see that they are in line with the interests of shareholders. This is about situations that, in our perception as executive board, would be exceptional and would never be required. If you dilute capital or if you significantly change your dividend policy, usually when things are getting worse, usually there is a cause for that. We assume that such circumstances will not occur over the coming years, and therefore we as a group could accept those specific rights over a limited period of time. They, as you could read, are connected to the 20% and 10% shareholdership. We concluded in the end of the day that they also serve the interests of all other shareholders. From that perspective, we had no problems.
About the extraordinary rights, exceptional rights, which brings us to the end of my presentation. What's the further process? We hope, obviously, that the shareholders today will enthusiastically support the transaction and all the other points on the agenda. If that is the case, we can move towards the closure and the acquisition for all permits. This transaction is subject to a number of permits. We need to go to the Dutch Financial Markets Authority that supervises competition on the Dutch markets. We have to go to the central bank. Because there is a bank, we also have to go to the European Central Bank and the asset manager supervisory bodies. Over the coming period, we will have to continue talks with all these bodies, talks that have already been started, of course, aiming to receive the necessary permits.
We hope that on the first day of Q3, we can have all the permits and do then, on the first day, the closing, which meanings, the keys of Aegon Nederland will be handed over to ASR. Then the real job starts, which is merging both companies, creating a single corporate culture. We assess that it will take us three years. Without talking you through the entire integration process, I want to highlight a few points. First of all, we think that the professional disability and other non-life, which is mentioned here as DB and DC, is something that will be done in they will be merged within two to three years. That should be done.
If you look at individual life, you see that transaction means that the partial internal model used by Aegon will be maintained for the Aegon portfolio at least, but that we will also try to make our portfolio partial individual, and we will do this before we do the conducting legal merger of pensions and life. This wll take at least two years, we think. It could also be two and a half years, meaning that the ASR books of life policies will have this partial individual approach. This is why the integration of pensions and life will take more time. This from the VIM, there is a Dutch game called Pim Pam Pet, but that's not related, I think.
If the VIM can be applied to pensions and life, we assume that individual life will achieve this within three years, and pensions probably will need more time, given the fact that at the same time we need to effectuate a transition of life in the under the pension legislation. At the same time, we want to keep serving our customers and be available for the customers. In conclusion, I want to say the following: This is a transaction we are proud of, that we are happy about. A transaction that we have achieved with a very good relationship with Aegon. Obviously there have been some tough moments, but that is normal in such a process. In the end of the day, I think we ended up with a great result.
If I look at the way the transaction has been received from the day of its announcement, I'm confident that we have found a sweet spot, as we say in the jargon. Meaning that for ASR shareholders, and that's who I'm addressing today, but also, the Aegon shareholders have a good deal. This is why the Supervisory Board and the Executive Board warmly recommend you support the transaction today. Thank you.
That applause that-
Well, that applause, I hope points to a very smooth continuation of this meeting. Thank you, Jos, for this explanation. Ladies and gentlemen, you now have the opportunity to ask questions. If you wish to do so, I don't have to explain. I can tell from, you moving to one of the two microphones already. Please speak into the microphone directly so that everything is very articulate and understandable on the website. We have Lard Friese, as I said earlier on, following all of this virtually. He will be able to hear that well, too. Please mention your name first. Please also mention the shareholder that you are representing. In the first round, we will allow a maximum of two questions per person so that everyone has enough time to ask a question.
If there are further questions after a first round, we'll see how it goes. I hope that was clear. I give you the floor. Thank you. I'm Gerben Everts. I speak on behalf of the Dutch Shareholders Association, VEB, on behalf of many individual shareholders, about 30,000, so I cannot give you the actual names with two points, so many million shares in hand. First, let me compliment Mr. Baeten with respect to the presentation he's just given. A presentation that was well prepared and was given freely. This shows us the intrinsic motivation of ASR, and that is something that we are very happy about. This EGM has support of very many shareholders. This shows that this insurance company should remain in the Netherlands, and that is what we indeed are fighting for and what the shareholders support.
This transaction is and sounds very good economically. It's a very good transaction for everyone, for the brands, for the mission of both organizations, for the strategic direction that is now actually chosen and followed. The life insurances show that profits are not in trying to sell more, but in achieving synergies and economies of scale, and indeed following up on all the policies in the next 10-15 years. Aegon has the opportunity in other markets to focus on more profitable segments of their business, and that is something that we only support. We appreciate the synergy advantages, but I do have a couple of questions, a bit more than two, but not more than five on my list. Synergy advantage is very important for the shareholders.
The dividend of the Aegon share is going to reduce in the coming three years. Synergy advantages of EUR 180 million are to be realized, and that is the outlook. I believe that that is per year. I hope that you can confirm that. Then we will see that back in the calculations of what actually remains for the ASR and Aegon shareholders, and that it will be reflected in the stock exchange. When two parties come together, mostly one goes up, the other goes down. In this case, both went up, and I think that supports the rationale behind all of this. The benefits. In the Netherlands, we're very good at strategic thinking, also policy thinking.
The government, for example, organizes the strategy and also the funds, but implementation is obviously where things become tricky because you will have to reshuffle positions. You have a lot to do. Do you have any guarantees for us? What steps did you take to ensure the operational availability and also the swiftness with which real results can be achieved in synergy? Are you ready for all of this operationally? This is something very practical that we wish to learn about this transaction. Another risk. A couple of permits are still outstanding and not small ones. The DNB, the Dutch Competition Authority. For us, it is important to understand the partial internal model, the PIM. This is what De Vries took from Nationale-Nederlanden to Aegon and which is now coming back via Aegon into ASR.
Capital demands and solvency demands can be reduced if you can indeed convince the authorities that this model is better than the standard model. For us, it is important that the Dutch National Bank actually agrees to that. What is your main argument? What are your expectations? Is there anything concrete behind this? Do you have any kind of promise from the DNB that this capital transaction can take place? My third question on governance. Interesting what you explained on your slide. It is something that we had to digest first. In the end, for the coming five years, the two positions in the supervisory board are reserved for Aegon, and certain other influencers are agreed upon. We understand that this is part of the negotiations.
We're not against the appointments, the fact that the existing Chair of Aegon and the very, previous, Chair of Aegon Nederland, who has a veto right for the coming five years with respect to important strategic decisions at ASR is a tricky situation in governance, because you sell something, you should take your hands from it. Time for a new management. Lard Friese is, of course, the successor, will still have this veto right for five years. This, in the governance relationship with a chair of the supervisory board, depending on a veto right of an individual supervisory board member is not easy. This is a question to the supervisory directors. Do you believe that the dynamics are ensured in such a way that this will not become a difficulty?
Obviously, we understand that the supervisory board at the moment knows what direction they want to maneuver in. This can all be quite difficult. I'd like to hear your comments on that. Another question. Five years, this 99.999% interest remains and the veto right. What on earth is going to happen afterwards? We wish to have the whole situation open. The veto rights off the table and the appointments, nominations from Aegon off the table as well, that we get normal governance by ASR. Another point with respect to what Mr. Baeten said. I read the shareholder circular yesterday, the ones issued by Aegon and ASR. Aegon was very clear, said that during five years, as if Mr.
Baeten does not remain until the end, Aegon has the right to have a confirmative vote on the new CEO. This wasn't in the shareholder circular of ASR. I believe that was an omission. I hope that we can correct it here. What kind of promise can Mr. Baeten give us in this respect, that after closing he will serve a full term of five years? What promise can Mr. Wijn give us that that is his intention as well? We believe that is very important. We hope that we get clarity and that no process of trying to find a new chair of the executive board or the supervisory board will interrupt the next five to six years. We do hope that we can get some assurance there. Those were my questions.
I'm afraid they were a bit more than two, that was it. You do represent quite a number of shareholders, so I've allowed you to finish. I'll hand over to Jos Baeten for the first answers. Baeten, let me follow up in the sequence of your questions. Operationally, ASR is ready. I cannot prove everything beforehand. I do know what our experience is and why we are confident that after closing, we can indeed take the necessary steps. Since 2015, we've been through quite a number of acquisitions. I understand not in the scope that we're looking at now, but from those acquisition, we've understood what to do with the life and non-life books, with the various parts of our operations.
Next to that, next to the members, in the supervisory board, we're going to be joined by very capable people from Aegon. There are people there too who are very experienced in integrations. That is true for our staff services, for our businesses. From that point of view, if you look at the integration as a big pie, we are going to cut that pie into pieces that we can actually swallow. That in the integration, for example, of the non-life portfolio, we believe that the automation decisions we've taken in the past, the dependence between the various businesses at ASR is quite low. The life business doesn't have to wait for integration on the side of non-life. A, we have a lot of experience. B, we're used to making plans and monitoring them.
C, we have capable teams on both sides that can ensure that this actually takes place. Looking back on all acquisitions in the past, I cannot really point to any one of which we would have to say now that they did not work out. Of course, I understand that larger companies aren't easy, but we do have the conviction that we can deliver and perform based on the experience in earlier acquisitions and the lessons we've learned from there. A second question with a number of sub-questions, was about the permits and the authorities. We've of course prepared all of this, and we have a team that took that up very seriously, and that during the preparations of this transaction had sufficient contact with the authorities.
We do need to accomplish those and get those permits specifically, that will require some more work. We agree. With respect to the partial internal model, until the closing, this PIM model for the life book of Aegon, we are going to see to it that we can maintain that, not more than that, because the process is quite extensive. We have good consultations with DNB, the Dutch National Bank. They cannot give us guarantees beforehand, we have ensured that this supervisory authority has given us the guidelines so that we can deliver the content. We put together clean teams of people from Aegon and ASR that can talk about this, at closing, we can guarantee that the value, the solvency value that we've indicated in the PIM can be maintained.
The next step that we're going to take, our own life business, is also going to be shifted to the PIM model. You just said that this PIM model was taken from NN to Aegon, that is not the case. This is an Aegon model. It's not an NN model anymore. Our own life segment is going to be transferred to that PIM. Other risk insurances, we're going to add some portfolios there, and we're going to put the whole non-life book on the PIM as well. This is going to take three to four years. We hope that the life business is going to work quicker. We cannot give any guarantee. DNB isn't giving any guarantees either about the solvency that those efforts will reach in the end.
It's not about reducing solvency, it's about making the risk profile better fitting. No guarantees have been given nor will be given. We are convinced that this will have a positive impact on solvency. A lot of analysts write about this. I can't do much more than quote what they are saying. They say, "Solvency increased by 25 percent points if you transfer to PIM." Aegon Nederland is already on the PIM, and for the combination, we can calculate about the half plus extra because we're going to put non-life on it. At roadshows, we're saying 15% solvency uptake. A question asked of the Supervisory Board, and part of the question was my personal commitment. If the Chair agrees, I would like to answer this directly.
If I hadn't had commitment, then I wouldn't be sitting here today with the full conviction of the positive benefit of this transaction. We had talks about that, too. You mentioned the term of five years. CEOs are, or their terms are mentioned in the appointment and nomination. I committed to that term with two conditions, that I will have to remain healthy, and that secondly, the supervisory executive board and the employees will still have to be content with me. If that is not the case, I will have to hand back my mandate. The supervisory board gives Mr. Baeten the full commitment and also his whole team, and we will get back to the point of appointing and continuing the appointment until the shareholders' meeting of 2026. We'll put that to the vote in a little while.
The experience of Jos Baeten in the area of integrations of bringing together insurance businesses, this experience is well-known for everyone here. That means that in the executional certainty, we believed it was very, a very good idea to ask Jos Baeten to stay on board for a longer period of time. This isn't an easy decision because it's a very heavy job, but we have received that commitment from Mr. Baeten, and we are very happy about that. With respect to the new supervisory board nominations and two additional supervisory directors, this was a request from the side of Aegon, and we actually had no problem whatsoever with it. I can make this sound even more, I can put this in even more positive words.
We believe these two Aegon directors are a very valuable addition. We understand why Aegon Nederland came with this request. For Aegon Nederland, for the Aegon Group, this is quite a step. I don't want to use any other words because that's going to be explained by Aegon this afternoon at their meeting. This is quite substantial. The substantial interest in ASR, the employees, the customers, all stakeholders, very understandable that this question was put forward. Two of the seven supervisory boards, 28% interest, 29.9. We believe that this was in the line of expectations. Moreover, Mrs. Jansen Heijtmajer is going to join the Nomination and ESG Committee. This is a committee in the Supervisory Board in which we discuss staff and HR issues. The Works Council, in their recommendation, supported this with their enhanced advisory rights.
We also believe that if you look at the fact that a good integration for all employees is important, then this addition to the committee is very valuable. Mr. Friese will join the audit and risk committee. You just discussed the importance of the PIM model. I can mention quite a number of examples why we believe this is a very valuable addition to our board. We had very extensive conversations to get to know both individuals. They are a very professional, very agreeable in the contact and strong characters, and we enjoy that at ASR Nederland. Nobody is made of sugar, and we cannot believe that we will land in difficult situations. These are individuals that will engage and commit themselves in the coming years. I hope that I've given you sufficient answers.
All of this will have to be legally established and laid down. The legal side has been looked into, and I believe that when we come to the appointment of those two directors, we can discuss that. May I come forward and say that I don't have any further questions? I believe your answers were quite extensive and quite clear. They show the character of the or the nature of this transaction and of ASR as a company. Thank you. Baeten. One answer. Your question also was what will happen after five years? If Aegon, after five years, is still shareholder of, at 29.9%, they will just be a normal shareholder, and all special rights will then be gone. Thank you. My name is Stevens. A number of questions have been asked.
The supervisory authorities were discussed, but the ECB approval wasn't mentioned yet. I'm a bit older, and I have experienced quite a lot. At times, remind me of the situation in Utrecht when the insurance company of Utrecht and Nationale-Nederlanden merged. The question was always which one was the largest. Aegon almost never come about because other insurance companies in the day wanted to cooperate, but that didn't happen. Now they are all coming together. I always view these movements very critically. I'm not the kind of person that only compliments others. I started calculating. I took the billions, EUR 13 billion if you add up, that means amounts to about 13%. Now Aegon Nederland, I arrived at EUR 3 billion-EUR 3.5 billion. Now let's assume that synergy effects are disappointing, at least partially.
I am afraid that you're not going to achieve the 12% capital demand. This is quite an expensive transaction. How did you arrive at the amount necessary? What kind of negative effects did you take into account? The stock exchange rate can change. That can be an advantage or a disadvantage. Buffers. 100% used to be the requirement. I hope that the requirements now can be reduced. If you base everything on the standard model, then those buffers can be reduced. By how much? Can you mention the percentages, and can you give us the positive influence on the returns? Artificial Intelligence. Artificial Intelligence is the buzzword at the moment. How are you going to approach that, and how will De Nederlandsche Bank deal with it, also with respect to European legislation? Next question.
How large is your dependence on large foreign insurance companies where a reinsurance is possible, but where larger players may want to pick the cherries off the cake? Those were my questions. Thank you. I'll hand over to Baeten. Mr. Baeten. Those were quite a number of relevant questions. This is a whole process that we tackled as a team of three, and Ewout is responsible for the financials, can explain how we arrived at the evaluation. You asked about the 14% and the synergies that might be disappointing and that this can be under pressure then, sales, synergies, et cetera. I'd like to give you some background to those numbers. The steps that we took departed from the Aegon company as it is at the moment. We did a book evaluation.
We're able to assess the company, made our own business plan based on how Aegon is set up in the Netherlands at the moment. This leads us to a capital generation expectation at EUR 530 million. We looked into the synergies we were expecting in the coming years. You can count, you can add that to the profits or deduct it from the invested capital, because the synergies in the life business are not in profitability, but in a higher solvency. That is how this expresses itself. That is why in the presentation, the invested capital reduces based on the synergy realization. If you add that together, you arrive at an expected capital generation of EUR 600 million and an invested capital of EUR 4.3 billion.
Here we depart from the assumption that we can do the synergy realization, and we've based all of that on what Joost just explained. Sales synergies, we haven't taken that into account in this business model. We looked into economies of scale, different pricing, so that maybe 10% of today's sales are going to be lost. We haven't taken into account that our sales will actually increase because of the market consolidation. We think that it is very important and also sensible not to bank on all of that. We took it out of the calculations. We believe that we've presented a very balanced ROI and that the numbers fit to that.
How then do you come to this profit of EUR 9 and something billion looking on these key figures? I came only to EUR 3.25 billion. It all depends on the way you use these key figures.
Indeed.
I use the number of components. One, which I see is the most appropriate, is the fact that you make a fundamental taxation of the company looking at the cash flows within the company. You can look at multiples for sure, but this is more like a check. First of all, the fundamental valuation must be made based on the cash flows and the best is to have access to the books to check the cash flows and then to extrapolate them. This gives you going concern value. This is a fundamental check. Then you look at the multiples whether they match. The conclusion is that looking at the multiples based on the fundamental taxation, we have selected appropriate value. Let me mention a few multiples.
We look, among other things, at the valuation, compared to the equity. This is unrestricted capital. This is the most determining multiple in insurance companies. You see that in the historic context, it is pretty low, which gave us the comfort that the fundamental taxation or valuation we implemented was done correctly. This is how we go about this, so it's really about what you see in cash flows. Maybe the ECB?
AI.
Oh, AI. Artificial intelligence. Well, first of all, let me answer this question by saying that Aegon has a lot of knowledge about this, on how to use this wisely in HR, for instance. We have a pool of people that can be very useful for both companies, the NewCo, and a number of frameworks are used in the industry and also in HR. First of all, we have the ethical frameworks. Yesterday, this was covered in the daily news. The insurance industry has incorporated these ethical standards. We must be aware of the values and the freedom we want to give to technology. Secondly, we should be aware of an ethical office or ethics officer we have in ASR that helps us think about the practical application of AI.
We are looking for the balance between the way AI can be used in our processes. For instance, customers like it when things are filled out without having to do it themselves, and our staff are happy not to do repetitive work. We try and use this, but we also try and make sure we can always check whether what happens in technology matches reality. This is how we deal with AI, and this is the way we believe we can use the combination of AI and human intelligence in the future. Thank you. I didn't see the national news yesterday. Says Mr. Swart, there was a very clear item on the risks and the possibilities of AI. Then I should have used that as the base of my question.
I thought you were following the news. We have the last question, Mr. Stevenson. This is about the way we look at foreign insurance companies on the Dutch market. Well, if you look historically, this is not a source for concern because we have seen many foreign companies come to Dutch markets with low rates, high losses, and then leave quickly. We are concerned about something else that we see happening. Not foreign insurance companies entering the Dutch market aggressively, but Dutch parties that are not really insurance companies. You asked about AI. We see companies in the world now that have so much data, and as far as we know, usually these companies are in the U.S., but I can't rule out China or even Russia. Let me stick to the U.S.
They have so much data that they can very easily catch the best business. The concern is, as you said, that parties may enter the market that are not under supervisory bodies in the Netherlands, that can offer rates for customers that basically have no risk and therefore can become customers at a very low rate, making that the core function of an insurance company, which is pooling risks and adding a price. That means that the product or service becomes accessible to the largest possible number of players. If all the best business disappears, it becomes more and more difficult to play that role, and then the price you have to charge to customers is increasing. We discussed this with the regulators, and I refer to legislation that is on its way.
We also discussed this through our organization, the Association of Insurance Companies in Brussels. It's good to see that both the Dutch regulator and the European Central Bank, as far as I can see, recognize the risk, that the Dutch authorities recognize the risk, and that, as a fruit of our activities over the past month, there is a growing understanding that we need to be very cautious with this and that this needs to be laid down in law, making sure that parties cannot simply catch the best business and make life very difficult for the remaining consumers. I'm not sure whether we can change the tide, but I'm already happy that there is a growing awareness that we can't let this happen simply like that. Thank you. Mr. Stevenson. Well, one more question.
No, you already asked your questions. No, one question wasn't covered, said Mr. Stevenson. That's the E.U. about the buffers, yes, my apologies. Mr. Hollegien, the approval of the ECB, this is the statement of no objection. This is something that is done through the Dutch Central Bank. The Dutch Central Bank will issue a recommendation to the European Central Bank about issuing a year statement of no objection about taking over these financial activities. It will be on the doormat of the ECB. This is part of the larger procedure that we hope to conclude in Q3, having the necessary approval. As for the buffers, I think the buffers. Oh, you asked whether they can be reduced.
If we look at the capital and dividend policy, you see that we're not going to deviate from that policy in the light of this acquisition, so we will maintain our policy. Let me remind you of this policy. Basically, it means that everything that is about 140% solvency ratio can be paid out as dividends. It is placed in the dividend account and everything above 160% will be allocated to the entrepreneurial zone. This is a zone that allows us to further invest in the company. We have a limit of 175% that allows us to buy back shares.
In the light of this transaction, and also in the light of the current policy, we decided to temporarily disconnect this, because if over the coming years we are going to focus on achieving synergy, on further strengthening the brand, we aiming to be the same company we are today a bit larger, we will not be buying back shares. Thank you for your answers, Mr. Davidson. I think we really have covered all your questions now. Yes. Great. Good morning, ladies and gentlemen. My name is Che. I am from Amsterdam. I read in the shareholder circular of ASR that a fairness opinion has been conducted by a business bank, UBS. This case so generated some results because in the Aegon shareholder circular, I read that they had two banks conduct a fairness analysis.
Why have you limited yourself to one opinion? Additional question. In the presentation, I read that UBS also has provided a bridge facility to ASR. Since it's the same corporate bank, I was wondering whether this is not creating any similarity of conflicts of interests. Thank you. Yes. CEO. First about the bridge financing. This was not only with UBS. It was done jointly by four banks, and that already covers the risk of conflicts of interests. My apologies. We opted for one bank because in earlier transactions we also limited ourselves to one bank. I think if you want to know why we, why Aegon chose two banks, I think it's a question you can address to their board.
We've been using one bank for many years because in our assessment that is sufficient. In addition, CEO, or Chair, we have been supervising the process as the supervisory board and in the subcommittee where there is investment banking in the board. This has been supervised, and we didn't feel the need either to involve a second investment bank because we deemed the procedure to be well-balanced and extremely solidly set up. Thank you, Chairman. My name is Frank Janssen. I represent the FNV trade union. First of all, I would like to thank Jos Baeten for his comments. Let me take off my glasses because I can't read with them. We as union are not only involved in agreeing on labor conditions, we're also shareholders as ASR, and we are also, by the way, Aegon shareholders.
Let me mention that. We think that the policy on the ESG is extremely important in mergers and acquisitions. We, as shareholder therefore, have several questions. Before I turn to the questions, I would like to emphasize that all questions we are asking are based on the information that has been shared with the shareholders, that is of a public nature, so not information that has been shared with the responsible manager within the FNV union. An acquisition of this scope falls under the behavior rules of the Social and Economic Council, and this means that union should be involved at some point in time that it can still influence the achievement of the acquisition, and that the works council can take stock of the opinion of the unions.
For further details and legislation, I can refer to Article 9, four per of the behavior rules of the Dutch Social and Economic Council. From the information provided, we learn that on October 21, the works council issued a recommendation, and that the stock exchanges were informed on October 27. Please correct me if I get this wrong. Yes, please go ahead. In the information provided, we read nothing about the co- rules of conduct for mergers, and this leads to a number of questions. First of all, why does the ASR information that has been provided in light of transparency and governance, we don't read that these rules apply to this acquisition. When have the unions been involved in the acquisition? What was the conclusion of the unions about this acquisition?
How does the way ASR acted relate to these rules of conduct? There where the unions have been involved, how could the works council take stock of the opinion of the unions? Here I'm not looking at the works council, but at you. How have you safeguarded this process in this procedure of acquisition? Clear question. I give the floor to Mr. Baeten as the Chair. Mr. Baeten, let me start with the dates you just mentioned. I assume that the dates are correct. 27 is correct for sure. I don't exactly remember the date of the Works Council recommendation, but I think 21 it sounds relevant. It's not relevant whether it's one or two days before.
I think you're aware of the fact that in the eyes of FNV union, the merge and acquisition rules have been followed insufficiently. You have submitted a complaint or expressed your intention to do so. I think that since then we have entered into constructive talks with the unions, and it has been a fair dilemma. I can imagine your position. Traditionally, we, despite some clashes with unions, have a very good relationship with the Dutch trade unions. Looking at the basic CLA that we concluded, I think we had a very good cooperation with FNV and we actually could express our enthusiasm on the stage together with FNV. Despite this good relationship, why didn't we involve the unions at an earlier stage?
This is a transaction between two listed companies, and one of the two companies has a listing in the United States. Very stringent rules apply to such companies. We are proud of the fact that there has not been a single leak, not through investment banks, lawyers, the works council, no leaks. We kept the circle of confidence as small as possible. Everything we could cover internally, legally, we covered because we wanted to involve as few people from outside ASR as possible. In the light of these arguments, we decided that only on the morning of the transaction the unions can be informed. We would have preferred to do it differently, but in the light of the weighing of interests, we made that particular choice. I can perfectly, yeah, imagine that the unions didn't like it.
In the light of our of the reasons I mentioned, this was our choice. I think that from that point, we have entered into very good talks. There has been a session. I think that FNV indicated that before the end of this month, they will give a substantive reply to see whether the questions that I have highlighted have received an adequate answer. Question. Very clear comment, still the question remains on the table, how the executive board or the supervisory board has safeguarded the need for the Works Council recommendation to take stock of the opinion of the union. In the light of your reply, I already guessed the answer, I want to hear. Mr. Baeten.
Formally speaking, the Works Council could not take stock of a recommendation of the unions because there was no such recommendation, they couldn't. Clear. Thank you for that very clear answer. Two additional questions, if I may, or two remarks. I think Mr. Steven said something about the synergy benefits of EUR 185 million. I've consulted the documents on how the 185 were calculated. It remains a guess for me and for us as FNV. We see in real life, in experiences, that in three out of four acquisitions, synergy benefits are presented in a too positive light and that they are disappointing. We'll live and see, but let me make that remark in the light of the question of the previous question. Another question which has been answered in part.
How does the ASR Supervisory Board intend to safeguard the independence of the Supervisory Board now a right of veto has been granted to an Aegon representative on some issues? Chairman of the Supervisory Board. I think the other point can be taken as noted, but let me answer your question. Part of it is about the people themselves. If you have personal conflicts of interests as a supervisory director, you are to act in line with the regulations of the Supervisory Board and Articles of Association . The specific rights as discussed are expected to be a subject of a substantive debate between the parties. In our assessment, this will not lead to dynamics that will push us in the wrong direction. This is mainly about dividend policy, but also about some other matters.
Our assessment is that as long as we have debate on the substance, and as I said before, these are kind and professional people, we will come to a solution. I can take you through all the rest, but that will mean reading out. We have a legal document that is binding for all the supervisory directors, be they dependent or independent. The added value that we see in the individuals coming from Aegon, we think that it's only an added value. It's a clear comment, and I don't think we have to discuss the qualities or the skills of individuals here.
The impression may be created of independence on paper, but dividend, for instance, is a difficult issue for supervisory directors because here you can have double interests, and I can only second your words, meaning that if there is a conflict of interest, there needs to be careful and balanced acting. We do have a concern there, Chairman. I share everything you said up to the word concern. We don't have that concern. There also is an overarching point, which is that every supervisory director is to serve the interests of the company. Thank you. Good morning. My name is Henk Brinks. I think I'm the last person this morning. Number six is on its way. Anyway. Please ask your questions. As the Chair, I will manage the floor.
First of all, I want to congratulate you with this acquisition. I have high expectations as an ASR shareholder that you will give us shareholders wonderful results. As was said before, this is a win-win situation. Two companies with different strategies playing in different leagues. ASR, as I said before, wants to be the best party offering insurance products in the Netherlands. Mr. Baeten very properly said that it's not only about the best risk, but also about higher risk, because maybe these people need insurances more than people who are having a good position and never have any damages. Also, Aegon wants to focus on growth markets worldwide, and that's a different league. You can win both matches or both leagues.
You can also help each other because you play in different leagues and therefore both can win. I have some questions left nevertheless. First of all, the EUR 4.4 billion acquisition sum needs to be better understood. I want to like, know more about the future balance sheet expectations. I don't have the data I can calculate by taking the current balance sheet. Still, the problem is that I don't have the Aegon data separately from their annual statements, and therefore I have a few questions. Could you indicate how much goodwill will be added to the balance sheet or how much will have to be written down? For instance, the Aegon brand that will disappear in three years, it will have to be written down. How much value do you allocate to this brand?
A few words please, about goodwill. In my simple mind, I think that it will be 13.8 additional shares in October and Aegon will have 57 million. That's 1.5 the number of current shares, 50% more shares in a company that is twice as large. You would expect that there should be twice as many shares or a doubling in the equity. You are approaching the magnitude of the share price. You will have 1.5 increased equity and not a doubling of equity, in my simple mind. I thought that you wanted to bring the solvency to solvency above 190%, but I can't understand what the balance sheet would look like. This really is beyond me.
If you would have shared more data about this in the shareholder circular, I would have understood, but now I simply don't get it. Chairman, should we go through just to Evert immediately? Oh, sorry, I had covered your questions. Not completely, says the person asking the question. I want to ask something about competition law. You are very optimistic about not having to divest anything and receiving permits despite your 25% market share in the Netherlands. Can you confirm that you expect not to have to divest or sell anything? Aegon Asset Management. I don't understand why the relevant parts of Aegon Asset Management are not bought. Now you have to use their services for 10 more years, and the people managing relevant assets could also have been included into the deal. Why wasn't that possible?
I'm surprised, honestly, because in this way you keep conducting business with the other party. Why not include it into the deal? It would have been a bit more, and then it would have been in your own hands. You would have been managing these people. I don't get it. The Aegon brand, it was already explained that within three years the brand will disappear, but many more brands are involved and probably lots of products will have two brand names. Can you say something about the further reduction in brand names within the company? You have gone quite far over the past years with all the brands you have acquired in the past, I think that we will probably can expect a whole round of brand cancellation.
This is not only Aegon snuffing it, but lots of brands disappearing. Chairman?
Thank you for the question. Can I give the floor to Mr. Baeten now? Yes, please. Fine. Thank you. Thank you both. Both chairmen in a moment, I'll give the floor to Ewout for the first part of your question.
Let me start by addressing your last question about brands. The we have Knab bank involved in transaction. This will remain Knab bank. It's a brand. It's a strong brand in the Netherlands, performing perfectly in the Netherlands, so we are not intending to change the brand name. The second brand is TKB. TKP, sorry, has a special position.
They don't only work for the portfolio now for Aegon and part of the portfolios of ASR, but about 75% of business is generated by lots of Dutch pension funds. Dutch pension funds consider it important for a brand to be independently situated. We have no intention to address the TKP brand. It's a strong brand, and we don't sell under that brand name. This is important. How do you situate a brand vis-à-vis of customers? Well, TKP is not going to enter Dutch market to sell products, that will not be an object of discussions. All insurance products and all mortgage products and all pension products will be offered under the Aegon brand. If you look at professional disability and non-life, there, the transition will be to ASR as quickly as possible.
For pensions and mortgages, as I said, we will have a three-year period to keep using the brand. The Aegon brand, as Mr. Friese will say this afternoon, will remain on the Dutch market in insurances and also in asset management. Your next question was why we didn't acquire this as well. Not all of it, says the question for the asking person, Mr. Baeten.
We take everything related to insurances and including the people, but asset management also covers services through third parties. We serve some pension funds, and we have the asset management activities. Negotiations always start with the question what someone does or does not want to sell. Finally, our position was that we want to manage our assets that belong to our obligations.
Aegon had this possibility that they didn't want to shrink their asset management activities. Negotiations started, and they brought us to the point where we are now. This is also the result of negotiations. We are very satisfied with this because it has a large asset manager involved that we will benefit from largely. Yes, it could have been differently, but the negotiating positions of the parties were different. Now I'm happy to give the floor to Ewout for the last question or first part of the question. Y
es. Your question was about the place of goodwill on the balance sheet. Let me start with the procedure. In the past period, we have been working on the starting balance sheet. This is the first step.
Based on the methods that we evaluate our liabilities and our assets, we will also evaluate the Aegon assets. You have the same accounting principles, and you apply them to the Aegon, and this is also the corporate equity position. The question is whether the position is higher or lower than the acquisition price. It's a bit early to already state this. I think that Aegon had about EUR 7 billion at the end of the year, and we have a EUR 9 billion purchase price. The question is whether there's any goodwill on the balance sheet as well. This is still work in progress because we still have to carry out the process to the end.
If you look at the equity position of Aegon, it remains to be seen whether there is any goodwill on the balance sheet or whether this is already going to the corporate equity.
When can we expect these figures in the first half year?
Answer. I think that in the half year figures, Aegon will still be Aegon and ASR will be ASR. On July 1, we hope and expect to have the closing, then we become owners of Aegon Nederland. That means that we'll have the first effects only when we present the full year figures for 2023.
Question. I have t o wait for a year, and today I have to decide whether the acquisition price is correct and to trust that your calculations are correct.
You should have calculated it correctly,
Mr. Baeten. He can calculate this guy,
Mr. Hollegien. If you look at the equity, the corporate equity... Certainly, I hope I am good at calculating. Corporate equity is correct. You are correct. We have to wait for one year. This is why we provided other elements, other financial components that do help us judge the merits of the transaction. It... Several things have been mentioned, such as the capital generation that's expected, because this does reflect the capital we expect to generate year-on-year by means of this transaction. If you compare this to ASR standalone, our conclusion is that this is a good deal for you.
Q uestion. My logic that a company twice as large should have twice as large equity, is that a mistake?
If you, Hollegien, if you look at the Aegon capital requirements, you see that they are lower. The capital that must be on the Aegon balance sheet is lower than the capital that must be on the balance sheet of ASR. The definition you're using sounds logical but doesn't work because. The question is what liabilities are on the balance sheet, what makeup does a company have? This determines the capital requirements, so that analogy does work.
A question. I'm going to vote in favor because I have a good gut feeling, but it's a gut feeling and I regret that. I would have liked to have had more elements for calculating. Now, still,
a question, Mr. Baeten, you actually, we owe you one more reply, which is about competition. We have submitted the documents with the competition authorities.
It's always difficult when legal procedures are still pending to anticipate the outcomes. Prior to the transaction, we did thoroughly study the market positions and the general approach the competition bodies and regulators take. We consulted parties that have experience in negotiating with regulators, and this led to confidence that we will need a few conversations to have a permit, but that there is no source for concern at this point in time. It needs to transpire still because the supervisory bodies or the regulators need to come with their conclusions.
Please go ahead. My name is Ab Flipse. I represent no 30,000 but one shareholders that I have a proxy for. On behalf of the shareholder, I have a few questions and remarks.
Once again, I would like to ask you to reflect your replies in the minutes. The annual statements have no reservations for the damage that are result of the policies in the past. There will be an important judgment in the Court of Appeal in Nationale-Nederland against an association of victims. The association of victims of the unfavorable policies have brought the case before the Court of Appeal. The parties are awaiting the judgment on the seventh of February after the closing of the stock exchange. You as managers of ASR, you know that Aegon has already lost the first case in part, and this was at the Court of Appeal at The Hague.
You can assume that the NN judgment will also apply to Aegon as a whole and therefore apply to ASR. It's good to know for shareholders that ASR and Aegon together represent EUR 2.4 million of sold insurance policies that are also called cheating policies. You know, Kees Koopman wrote a book about the strangling hold of Aegon. I am worried about Aegon becoming a part of your organization, because even with a damage of EUR 1,000 per policy, this is EUR 2.4 billion in potential damages. If the Court of Appeal on the February 7th will follow the recommendation of the Supreme Court, the moment of truth will come for Aegon and ASR. My question to you is the following: How likely do you think this risk is?
In other words, this multi-billion sum in damages, how likely do you assess it is? How will you compensate those shareholders? This whole story of the policies is not reflected anywhere. I'm concerned, and besides being a proxy holder on behalf of Ms. Van Lanschot, you know me in other capacity. I am really worried, and I would like to close this chapter. I have to say that your proposed operation is very enchanting to me, but I'm really worried about this usury policies, because this year is the year of truth.
Mr. Baeten. Thank you. This is a bit of a procedural reply, Mr. Flipse, but I think you expect me to give this.
You have connected a number of court cases, and you already preempt the outcomes of these legal proceedings. I think it's early to anticipate their outcome. We have a different perspective on the potential outcome. I think it's difficult to make any substantive statement on the cases. We look forward with confidence to these judgments. The judgment you refer to is a specific case with specific circumstances that is now before the Court of Appeal. Let us wait for the outcome, and let us then see whether the impact, as you mention it, you mentioned some figures. As usual, I warn about mentioning figures because a lot of has been paid out in compensations by ASR and by Aegon. I think that mentioning large figures helps generate attention.
I think as usual, we must be very cautious by mentioning figures without the necessary substantiation, which is either a judgment or a real calculation.
Question. I think it's one thing to not to give figures, something else not to mention the proceedings at all.
Mr. Baeten, the proceedings as such have been discussed in due diligence and detail. We made our own legal assessment, including a risk assessment. Thank you.
Do you think your question has been sufficiently answered?
Yes, it's a correct answer, and I understand Mr. Baeten's answer perfectly, and time will show where we will find ourselves. I do hope that shareholders will take stock of the fact that this is out there. It's an old file. It's an old story, but it's not done.
I think, based on 20 years of experience, that this year could be a breakthrough in a negative or positive sense. I really hope the case will be solved. This would be good for all concerned, but something will happen this year. Thank you for your question and your comments.
Thank you, Chair. I'm Gerlinde van der Heide-Wijma. I speak on behalf of PGGM and a couple of others. My question resembles earlier questions. The relationship agreement of Aegon says that if Bart De Smet doesn't serve a full term, the nomination of a successor will require the vote of the two Aegon supervisory directors. That is not in the information given by ASR. I believe that this is something that a committee would also have to decide. Why is it not in the relationship agreement? What is specifically now the term? Normally, it's a four-year term, and this time it's a two-year term. This is a mistake on our side. It was correctly shown in the presentation. It was always correctly presented in all documents. This right exists.
The term of Mr. Baeten and of Jos is until the general meeting of 2026. A term doesn't have to be four years. It's a maximum of four years. We set this term and deadline in good consultation because it shows the expected duration of the largest parts of the integration. In this way, we've established continuity for all stakeholders by nominating someone with a huge experience. I believe I don't have to expand on that. Just imagine the following were to happen, that Jos leaves earlier, but this is not intended, and Jos explained his own views earlier on. Just if looking at the situation then, I cannot imagine which Supervisory Board were to nominate a CEO if there wasn't one joint opinion on the side of the Supervisory Board. You can only work together with full confidence.
What does it then matter if they have this right? We are going to go for unanimity anyway. This is an additional right which gives Aegon extra comfort. If they hadn't requested it, they would have de facto have received it anyway. Clear. Thank you. Looking into the audience, I've offered you a lot of time and space for your questions. I hope that you will reward that in the further course of the agenda. I see no further questions. Now that I can note that there are no more questions, we can proceed to the vote. As indicated earlier, voting will take place electronically. When you entered the hall, you received instructions at the registration desk. As long as you do not log out from the Lumi AGM website, you will not be asked to fill in details again.
You will see various voting points on the website screen remain logged in. There are people from our organization who can help you. If you wish, please just raise your hand. Prior to the meeting, shareholders had the opportunity to exercise their voting rights through e-voting. These votes are included with the electronic votes at the meeting and displayed together in the result of the vote on the screen. The issued share capital, as at record date, consisted of about 150 million ordinary shares, on which a total of about 148 million votes could be exercised.
Please be informed that at this meeting, 1,938 shareholders are present or represented, representing 110,909,570 votes, representing a percentage of a bit less than 74.98% of the total number of votes that could be cast at this meeting. Why am I saying that? We have to recalculate that percentage or at least the decimal points of it. What we're going to do now is we are going to do a practice round first. It's not difficult. I'll ask you to log in. You see the practice ballot, and I would like to open your vote. This is a minimal IQ test. The question is: Is it seventeenth January today? If you're in favor, you can click four. If you're against, click on that one.
If you wish to abstain, click three. If you do not give a choice or press several buttons at once, this counts as an absent. You have about 10 seconds to enter your choice. You can change your choice or vote during these 10 seconds. Your very last vote or choice applies. I now open the vote. I now close the vote. The result is on the screen. Would the two, the votes against, come forward afterwards? Maybe you're in a different year based on different religious calendars. Anyway, I think the exercise went well. Everything seems to be vote working. I thank you for your cooperation. We now move to the vote on agenda item 2 A, the proposal to approve the acquisition of Aegon Nederland N.V.
Perhaps needless to say, I'd like to remind you that taking this decision is a condition for the proposed transaction. The executive and supervisory boards therefore anonymously recommend that you vote in favor of this resolution. The vote is open. You have 10 seconds. The vote is closed. The results are on the screen. On behalf of the supervisory and executive board, I am pleased to note that this proposal has been adopted. We move to agenda item 2 B, the proposal to authorize the executive board to issue ordinary shares and/or grant rights to subscribe to ordinary shares in connection with a proposed transaction and its financing. As already explained, the purchase price for the transaction will be paid partially in cash and partially by issuing new ordinary shares.
It is proposed to authorize the executive board to resolve to issue ordinary shares to Aegon Group in connection with the transaction to issue ordinary shares and/or to grant rights to subscribe for ordinary shares in connection with the financing of the transaction. This issue may take place in one or more tranches. The executive board in each case will only be able to use this authorization with approval of the supervisory board. For clarification, I also mentioned that this authorization is additional to the regular one requested at the annual general meeting most recently granted on May 25, 2022. As the authorization is granted in the context of the transaction, it is limited in validity. Namely, until the earlier of the moment, immediately following, one, the closing of the transaction, or two, the termination of the purchase agreement between Aegon Group and ASR.
You've been able to read all of this in the meeting documents. Are there any questions? I note that there are no questions. I proceed to the vote. The vote is open. You have 10 seconds time. I now close the vote. Let's look at the screen for the results. I note that the proposal has been adopted. I close agenda item 2 B and proceed to 2 C. This is the proposal for the authorization to restrict or exclude preemptive rights. It is proposed to the general meeting to authorize the Executive Board to limit or exclude preemptive rights of existing shareholders in respect of the issue of ordinary shares or the granting of rights over shares based on the authorization you've just given. The Executive Board can only use this authorization with the approval of the Supervisory Board, and the authorization has limited validity as described earlier.
Again, the authorization is additional to the regular annually requested authorization most recently granted on May 25, 2022. Are there questions? I note that there are no questions and proceed to the vote. The vote is now open. You have 10 seconds time. I close the vote. For the listeners at home, there is some smiling here because someone came in at the last minute and was able to cast a vote in the last seconds. Now, looking at the screen, again, we can note that the proposal was adopted. I close this agenda item and move on to agenda item three, composition of the Executive Board.
Part of the transaction, this was discussed extensively, is that Jos Baeten's term of appointment as member and Chairman of the Executive Board is extended up until including the 2026 general meeting, so that he is able to oversee the integration of ASR and Aegon Nederland. This appointment term would otherwise expire after the 2024 general meeting of shareholders. As said, but I wish to repeat it, the Supervisory Board is convinced that Jos Baeten is the right person to lead the integration process. His knowledge and experience of integration processes is very extensive.
Also, his connecting, result-oriented, and open management style of Jos Baeten and his fellow board members is going to be extremely valuable, both for the integration and the further development and rollout of ASR's mission and strategy. The supervisory board therefore intends to reappoint Jos Baeten as member and Chair of the Executive Board, subject to conditions and with effect from the closing of the transaction until and including the annual general meeting in 2026. Jos Baeten's resume and the works council's positive advice on this reappointment are part of the meeting documents of this EGM. Are there questions about this conditional proposal to reappoint Jos Baeten? I couldn't imagine otherwise. This means there are no questions, and I would like to vote on this agenda item. Oh, I'm sorry. This wasn't an item for the vote, only for discussion. Thank you for the discussion.
It's quite complex, isn't it? We will proceed to agenda item four. What is this about? It concerns the conditional nomination for the appointment of two new members of the supervisory board. This is going to work in three steps, and I'm going to say this out loud to keep my mind focused. One, we are going to inform you of this. Secondly, you have the right to make a suggestion. Thirdly, we are going to vote. ASR and the Aegon Group, as part of the transaction, will enter into a relationship agreement from the closing onward. This will include agreements on the governance. One of the agreements is that Aegon Group will nominate two new ASR supervisory board members, whom ASR's supervisory board will nominate for appointment from the closing onwards.
One of these members must be both female and independent within the meaning of the Dutch Corporate Governance Code. For this purpose, Daniëlle Jansen Heijtmájer r has been nominated for appointment for this at this meeting. The second member is to represent Aegon Group as a future shareholder and will be the CEO or CFO of that group. In this case, it is the CEO of Aegon Group, Mr. Lard Friese. The appointment term for both supervisory board nominees is four years from the closing. Once Aegon Group's shareholding falls below an agreed limit, which is 20% for Daniëlle Jansen Heijtmájer and 10% for Lard Friese, the Aegon Group must ensure that the relevant supervisory board member resigns immediately. A further explanation of this agreement between ASR and Aegon Group can be found in the shareholder circular, which is part of the meeting documents.
This means, with effect from the closing, that the membership of the supervisory board will be increased from five to seven members. Are there questions about this notification? I note that there are no questions about this notification and proceed to the second step under agenda item four, which is agenda item 4 B. The extraordinary meeting has the opportunity to make recommendations, and this is in accordance with Article 22.5 of ASR's Articles of Association. These recommendations are within the framework of the conditional nominations just discussed. Persons recommended must meet the profile of the supervisory board and comply with relevant laws and regulations. Before this meeting, no recommendations were made. Are there any questions about this course of events, or are there now perhaps recommendations? That is not the case. This brings us to the conditional nomination of Daniëlle Jansen Heijtmajer.
This nomination will start from the closing and is subject to the approval by the Nederlandse Bank. Term of appointment is up to and including the general meeting to be held within four years of the closing. This is expected to be the one in 2027. Mrs. Daniëlle Jansen Heijtmajer is independent within the meaning of the Dutch Corporate Governance Code. You can read her CV and the motivation for nomination in the meeting documents. If she is appointed as of the closing, she will also be appointed as a member of the Nomination ESG Committee . The nomination is carried unanimously by the supervisory board and supported by the executive board. The works council's exercised its enhanced right of recommendation regarding this nomination.
You can read this recommendation and also the positive opinion of the works council in the meeting documents. The works council decided not to provide further explanations during this EGM. Before I give you the opportunity to ask questions, I would like to give the floor to Daniëlle Jansen Heijtmájer , who will briefly introduce herself. Danielle, please. Good morning. Good morning, ladies and gentlemen. I was indeed asked to present myself briefly. I am Daniëlle Jansen Heijtmájer . I work at FrieslandCampina. Since 2016, I've been involved at Aegon Nederland, and first around as a chair of one of the committee and since 2018 as a Chair of the Full Supervisory Board. Furthermore, I am also a supervisory board member of TKP Pensioen and Uber Payments B.V. I've been asked what I find most important at Aegon. It was the team spirit and the resilience of the people working there.
We had to do with all sorts of changes in regulations, in related work on cost, efficiency cuts, et cetera. People have always proved to be very resilient, engaged. Now, this applies to this merger as well. In addition to my experience as a supervisory board member in the insurance sector, I also have extensive experience in change management, both my current role at FrieslandCampina and previously at Shell with large reorganizations, often worldwide implementation, large projects. Specifically change management, engaging people and stakeholders was extremely important. I had a lot of experience there, also in the operational sphere. My knowledge and experience in the last 40 years would like to support ASR and Aegon in the fusion of these two companies.
I know ASR as a very strong, pragmatic and well-managed insurer, leading the way on sustainability issues in the operational arena. Seeing to it that you can implement and execute what you've put down in theory. ASR is put together of people who actually engage and commit themselves. This gives me the trust and confidence that things are going to go well. When I was invited to become supervisory board member, I answered quite quickly, and I'm very happy to say yes. In the discussions with the works council and supervisory board of ASR, it was clear that they believe in this strategy. Everyone understands the logic behind this proposed transaction. The culture here at ASR is open, transparent, opinions are heard. This was very clear from my talks with the works council and the supervisory board. These were inspiring sessions.
There was a click. I also noticed that the cooperative way resembled how we cooperated at Aegon Nederland in the supervisory board and with the works council. I believe this also shows how well thought out this transaction is. I look forward to working in the supervisory board. Thank you. I would now offer the audience an opportunity to ask questions. Thank you, Chair. My name is Stevens of the Foundation for Legal Protection of Shareholders. Well, the question we have is the nitrogen difficulty. ASR owns quite a large area of ground, and you are in the FrieslandCampina management, not in the executive board, but just below that. Isn't there some kind of parallel to your nomination? Answer: none. ASR and you are dependent on whether farmers are allowed to continue their business in the Netherlands.
I would like to explain that this is very separate from my other roles. If I am part of the supervisory board of ASR, I have to work for the, and in the interest of ASR. If there's a conflict of interest at any point in time, then you recuse yourself from the decision to be taken at that point in time. Stevens: You are member, to be member of the supervisory board of ASR. They have 14,000 ha of in the Netherlands, some kind of decision will have to be taken about the agricultural sector in the Netherlands. Soon as there's any, at any point of time, a conflict of interest, I just will not vote on that decision. I will recuse myself from that decision. Stevens: Behind the screens, behind the screens, all sorts of things can happen.
That does not happen. Otherwise, I wouldn't be standing here if it were to go that way. Mr. Wijn, maybe you have an addition to that answer. I think that the answer was quite correct. Of course, it is important to have a supervisory board member that has broad activities and experience. Nomination in the ESG committee, you've focused attention on the nitrogen issues earlier on. It's important to have people on board with such a broader view and experience. If there were any issue, I can assure you that behind the screens, no different from in front of the screens. At that point in time, someone will have to leave the room and recuse themselves from further discussions. Are there any other questions? Thank you. I note that there are no more questions.
We proceed to the vote. You again have 10 seconds time. The vote is now open.
The vote is closed. Let's look at the screen for the results.
Very glad to note that this proposal was adopted. Danielle, you talked about a click. This click is on both sides. We're looking forward to cooperating with you. Let's now move forward to agenda item 4D. 4D is the proposal for the conditional appointment of Lard Friese as member of the supervisory board. Lard is present virtua lly via a video connection. We'll wave back. Hello, Lard.
Lard's appointment also will start with the closing of the transaction, the closing of the AGM after that, which is expected to be in 2027. This intended appointment also is conditional to approval by the Central Bank. Lard Friese, because of his position in Aegon, is not independent in the sense of the Dutch Corporate Governance Code.
His CV and motivation letter have been included in the documents for the meeting. If Lard is appointed as of closing, he will also be appointed as the member of the Audit and Risk Committee from that date, and this nomination is also unanimously supported by the Supervisory Board and the Executive Board. The positive position of the company Works Council also is reflected in the documents of the meeting. The Works Council also decided not to give any further comments on this nomination at this AGM. If the extraordinary AGM will approve this appointment, we will also ask the approval of the Central Bank. Before I give you the opportunity to ask questions, I'm happy to give the floor to Lard Friese. Lard, floor is yours. Yes. Thank you. Good afternoon, ladies and gentlemen.
First of all, I would like to apologize for the fact that I am speaking to you remotely in this way and that I'm speaking to you in this particular way. However, at 2:00 we'll have our own AGM on the exact same topic you are discussing at the ASR AGM, I can't be with you physically. My apologies. My name is Lard Friese. As you have read in the convocation, since 2020, I've been the CEO of Aegon Group, for most of my professional life, I have been working in the insurance industry in the Netherlands and abroad, including employment with Aegon, but also with NN Nationale-Nederlanden. In this capacity, of course, I have known ASR for a long time, including Jos Baeten. I think he and I have known each other for about 30 years.
In my view, the transaction you have just approved, and I would like to congratulate Jos and Joop and the team. I think this transaction offers a unique opportunity for shareholders, customers, and employees of both companies, and I have full confidence in the successful future of such a combination. This confidence is also reflected in the strategic interest that Aegon will retain as a shareholder in ASR following the closure of the transaction. In line with the scope of this interest, I have been nominated as a dependent supervisory director. Just like Daniëlle, you just encountered, I had a discussion with the Works Council, the Executive Board, and the Supervisory Board of ASR and came to exactly the same conclusions.
This is a very skilled, pleasant, group of people who bring together a lot of experience and are willing to make this into a great success. The people in this organization are highly motivated, transparent. They believe in the strategy. I think that, the presentation you've seen, for instance, in the presentation by Jos, is an expression of the fact how much passion and motivation the company has to make this into a success. I'm very happy to contribute to this. Within the Supervisory Board and the Executive Board, there is a lot of confidence. You feel this in conversations. There's a lot of scope for different perspectives.
My purpose, my goal is to use my experience within the insurance industry for this new combination and to do anything possible in my position as a member of the Supervisory Board to make this into a success. Specifically, I hope to make the integration successful and to smooth and help create a combination that benefits all stakeholders. Thank you, Chairman. Thank you, Lard, for these comments. Let me look around the room. Any questions addressed to him, to Mr. Friese? I conclude that we have no questions. That brings us therefore to the vote. Once again, you have 10 seconds to cast your vote. The voting is open now. Let us look at the screen. I conclude that this proposal has been adopted. Lard, once again, congratulations with your coming integration into the ASR Supervisory Board.
I hope you have seen in the debate how much we welcome your person and your experience as a contribution to the success of this transaction. Let me benefit from this opportunity to wish you all of luck, best of luck at the upcoming Aegon shareholder meeting in The Hague. It starts at two, so if you are going there, don't hang around. Check your app on your phone to see whether any traffic jams or not. Danielle and Lard, once again, a very warm congratulations with your conditional appointment. As of closure, we welcome you to the Supervisory Board. Ladies and gentlemen, with this last vote, I'm also happy to conclude that all conditions regarding the decisions of the AGM about the transaction have now been met.
On behalf of the Executive Board and Supervisory Board, I thank you for this, and I thank you for your confidence. That brings me to item five, any other business. I look around the room, and I see that indeed we have a question. Yes. My name is Gerben Everts. I am from VEB. I don't have a question, but an interim conclusion. I think we're at half time of what looks like a friendly, no red cards. Why? I can't escape the impression that the different players have tested the waters on the way this meeting on 17th January will end.
It really helps, and I hope we will be on time to get to the Aegon AGM to express how much we value this expression of trust on the level of both companies and how much it's helped to either look into questions or to actually receive answers to questions in the shareholder circular. Sometimes the financial sector is seen with dissatisfaction or doubts on what happens there. Yesterday, we've had the national news, and some of you watched that, and certainly Ingrid de Swart watched the news. I also watched Planet Finance, a VPRO program, which is about the last bastion of financial markets, the trading on the stock exchanges. The people running around in these gilets later, with the remark how unregulated this is, and then there was a remark about the entire financial sector.
What is this all about? How is this possible? Well, today we see the other side, the back office, the daily contacts with consumers, with clients, daily managing insurances, pensions, something everybody in the Netherlands are involved in of their own volition or compulsorily, and this is important. I support criticism, here we see dynamics that are careful, that are with due care, and that is something represented by ASR, and that aspect sometimes is forgotten. Looking for efficiency there, strategies there, looking for a situation where in 10 years people are satisfied with ASR is something we see a stone being posed for. I feel like the cheerleader during halftime. The second half is still coming therefore one remark. This demands something.
Your motto is, "This is a time of doing." This is a good day. Probably tonight you'll have a good bottle or a good dinner, but after that, a lot remains to be done. ASR also is going to sail higher winds. This is about the way you deal with the solvency requirements and something will be demanded from the organization, something you promised today, and I wish you wisdom and courage in the process. We are going to look over your shoulder. You have a lot of support today, 99% in most cases, but that will not always be the case. Other issues will be on the table, and I wish you wisdom and strength in dealing with these issues, and we will be watching you. Thank you.
Mr. Baeten, thank you. I don't think there was a question there. We are far from naive. We have always told each other that up to one-seven it's all fun. After one-seven the real work begins because this is when we bring two large organizations together. We look forward to working on this with the 7,500 people that will work for us, Chairman. Let me add to this that we appreciate all the input received at meetings such as this, just including difficult questions. That doesn't make anyone better. Any other questions? No. That brings me to the last item, which is closing this meeting. Before I do so, I want to say the following emphatically.
On behalf of the Supervisory Board unanimously present, we really would like to express to the Works Council, the other employees, who are present here at the level of directors, at other levels, and also to the board, and we would like to express to the board our gratitude for achieving this transaction. I read in the employee magazine of this week that someone actually spent a couple of weeks in a hotel in order to be completely committed to this transaction, to working on this transaction. It's phenomenal how dedicated these people have been. It's also great to see how constructively and how substance-based the work of all on the success of this transaction has been. My gratitude for this. I wish you all of luck with preparing the closing.
Jos will be the first to say that the real work is still to come. Still, I think gratitude is appropriate. What you have achieved so far is impressive. In conclusion, let me thank you shareholders for the confidence that you have shown for this transaction and therefore the confidence you have shown to ASR. Thank you for your presence. Thank you to your contributions to this AGM. I'm very happy to invite you to a lunch in the room next door. If you have any questions, you can address us. If you are going to the Aegon AGM, you can take a lunchbox to eat on the way, making sure that you will look just as sharp and just as fresh in your mind as you are here. I now close this meeting.