Colombian giant: Grupo Sura's $3.7 billion acquisition of ING assets has created one of the top financial service firms in Latin America.

Author:Moloney, Anastasia
Position:INDUSTRY REPORT: Latin Trade's DEALS of the YEAR
 
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BOGOTA -- It has been a stellar year for Colombia's Grupo de Inversiones Suramericana (Grupo Sura).

With the acquisition of most of Dutch group ING's Latin American insurance and pension portfolio in July, the Colombian investment group has positioned itself as one of the leading providers of financial services in the region.

Getting there has been a rollercoaster ride, says Andres Bernal, Grupo Sura's vice-president of investment.

"It's the largest acquisition of a foreign company ever done by a Colombian company. We've broken records. It's been a roller coaster. We are very proud, excited and fired. It's been a long journey," Bernal says.

That journey started in January 2011 when ING was looking to shed assets to comply with the terms of its government bailout following the 2008 financial crisis.

Few could have anticipated that this would become a surprise opportunity for Grupo Sura, a relatively little-known investment group with a team of 18 people based in Colombia's second city, Medellin.

When ING hired Goldman Sachs as their main advisor, the investment bank compiled a list of possible buyers for the Latin America arm of ING's insurance business. Grupo Sura didn't even feature on the original list.

But David Bojanni, president of Grupo Sura, had a different game plan. He relayed a message to ING expressing the company's interest in buying part of the Dutch giant.

In just several months, Grupo Sura beat off big names in the insurance and pension industry to win the deal.

"We've heard that there were 15 bidders behind ING in the non-binding process, and five of those, including Grupo Sura, were chosen to take part in a binding process, including Prudential, Principal, Metlife and a joint-venture company that included interest from Mexico, Peru, Colombia and Chile," says Bernal.

It was just a small difference that finally clinched the deal.

"We paid almost $3.7 billion for ING. We won by a tiny difference, by less than one percent of what the runner-up offered, which was $3.67 billion," Bernal says.

The deal includes ING's assets in Chile, Colombia, Mexico, Peru and Uruguay, excluding ING's 36 percent stake in leading Brazilian insurer Sul America SA, which will be sold off separately.

Analysts say the deal is a fair price in a region where positive economic growth is projected, giving Grupo Sura access to Latin America's key markets via the second-or third-biggest pensions and insurance groups.

"It's a reasonable...

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