ING sells Canadian portfolio stake in EUR 1.5b deal

Dutch banking and insurance group ING announced on Friday that it has agreed to sell its 50% stake in the Canadian light industrial property portfolio, ING Summit Industrial Fund, to a joint venture between KingSett Capital and Alberta Investment Management Corporation (AIMCo).

In addition to its direct investment in Summit, ING has an indirect participation through its 7.8% unit holding of ING Industrial Fund (IIF), an ING-managed listed property fund in Australia which owns the remaining 50% in Summit. As part of the transaction, IIF has agreed to simultaneously sell its stake in Summit to KingSett/AIMCo. As a result, ING's indirect participation in Summit will end as well.

The transaction value for 100% of Summit is approximately CAD 2 bn (about EUR 1.5 bn) and includes assumed debt.

'As we focus on improving the performance of the Banking and Insurance businesses, managing risk and our business portfolio remain important priorities,' said Jan Hommen, CEO of ING Group. 'This transaction is in line with ING's stated objective of reducing its exposure to the real estate industry.'

Separately, ING has agreed to sell ING Real Estate Canada, the manager of Summit, to KingSett/AIMCo for an undisclosed amount.

The transaction is not expected to have a material impact on ING Group's results and capital ratios and is expected to close in the fourth quarter of 2010, subject to regulatory approvals.

ING said that the transaction will not affect the earlier announced evaluation of the position of ING Real Estate Investment Management within the bank. This separate process is ongoing.

Summit is a real estate investment fund that focuses on Canadian light industrial real estate. The fund's portfolio comprises over 400 industrial properties located primarily in major metropolitan markets in Canada.

KingSett Capital is a Canadian private equity real estate investment business co-investing with pension funds and high net worth individuals. AIMCo is one of Canada's largest institutional investors. It manages about CAD 70 bn of Alberta public sector pension and endowment assets, including a real estate portfolio valued in excess of CAD 5 bn.