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2017-02-02

Delta Lloyd: Recommended public cash offer by NN Group for all issued and outstanding ordinary shares of Delta Lloyd

Transaction highlights

* The offer is an all-cash public offer for the issued and outstanding
ordinary shares in the capital of Delta Lloyd at an offer price of EUR 5.40
(cum dividend) per ordinary share, representing a total consideration of
EUR 2.5 billion
* Offer is supported and recommended by the Delta Lloyd Executive Board and
the Delta Lloyd Supervisory Board
* Positive advice has been obtained from both the NN Group and Delta Lloyd
Works Councils
* Offer Period during which Shares may be tendered pursuant to the Offer will
commence at 09:00 hours, CET, on 3 February and will expire at 17:40 hours,
CET, on 7 April 2017, unless extended
* Delta Lloyd will hold an extraordinary general meeting of Shareholders at
10:30 hours, CET, on 29 March 2017, during which, amongst other matters,
the Offer will be discussed. Immediately following the meeting, Delta Lloyd
will hold a second EGM to resolve upon the Legal Merger
* The Offer is subject to the satisfaction or waiver of the Offer Conditions
as set out in the Offer Memorandum
* The Offer is subject to a minimum acceptance level of 95% of the Shares.
The minimum acceptance level is lowered to 67% if the Legal Merger is
approved at the Delta Lloyd EGM
* The Offer is expected to be completed in the second quarter of 2017

With the publication of the Offer Memorandum today, and with reference to the
joint press release of NN Group and Delta Lloyd dated 23 December 2016, NN
Group and Delta Lloyd jointly announce that NN Group Bidco B.V.
, a directly wholly-owned subsidiary of NN Group ('the Offeror') is making a
recommended public cash offer to all holders of issued and outstanding
ordinary shares in the capital of Delta Lloyd (the 'Shares') to acquire their
Shares at a price of EUR 5.40 (cum dividend) in cash (the 'Offer Price') for
each Share (the 'Offer').

Lard Friese, CEO of NN Group: 'With the launch of the offer today, we are one
step closer to bringing together two leading insurance, banking and asset
management companies and strengthen our positions in the Netherlands and
Belgium. The combination is anticipated to create value for shareholders and
will drive further improvement in customer service and experience. We
recognise that combining our businesses will require significant effort from
all of us, but it will also lead to enhanced opportunities. We are pleased
with the support and recommendation of the Delta Lloyd Boards and are
convinced that the offer is in the interests of both companies'
stakeholders.'

Hans van der Noordaa, CEO of Delta Lloyd: 'We believe a combination of NN
Group and Delta Lloyd is in the long term interest of our stakeholders
including our shareholders. The offer provides a certain cash premium for our
shareholders. Therefore the Delta Lloyd Boards recommend to the shareholders
of Delta Lloyd to accept the offer and to tender their shares pursuant to the
offer. The combined company will be a leading insurance and pension company
in the Dutch market, with strong presence in Belgium and an attractive
proposition in asset management and banking. Our customers will benefit from
the solid capital position, customer focus and excellent capabilities for
innovation and product development this combination will bring.
Unfortunately, the well respected and strong Delta Lloyd brand will cease to
exist and the combination of the two companies will result in uncertainty for
employees. We will do everything we can to provide them with a new
perspective and opportunities within the new company or elsewhere.'
The Offer

The Offeror is making the Offer on the terms and subject to the conditions and
restrictions contained in the offer memorandum dated 2 February 2017 (the
'Offer Memorandum'). Subject to the Offer being declared unconditional
(gestanddoening
), holders of Shares (the 'Shareholders') tendering their Shares under the
Offer will receive the Offer Price in consideration for each Share validly
tendered (or defectively tendered provided that such defect has been waived
by the Offeror).

If, between the date of the Offer Memorandum and the Settlement Date, Delta
Lloyd, by any means whatsoever, declares any cash or share dividend or other
distribution and the record date for such cash or share dividend or other
distribution occurs on or prior to the Settlement Date, then the Offer Price
will be reduced by the full amount of such distribution made by Delta Lloyd
in respect of each Share (before any applicable withholding tax). For the
avoidance of doubt, the interim dividend of EUR 0.10 (ten euro cent) per
Share declared by Delta Lloyd and paid on 8 September 2016 will not be
deducted from the Offer Price.

The Offer values 100% of the Shares of Delta Lloyd at EUR 2.5 billion. The
Offer Price represents a premium of approximately 31% over the closing price
of EUR 4.12 per Share on 4 October 2016, the last trading day before NN Group
initially announced its intention to make an offer for Delta Lloyd.
Furthermore it represents a premium of approximately 38% relative to the
average closing price during the last month and a premium of approximately
55% relative to the average closing price during the last three months prior
to the initial announcement.

As previously announced on 23 December 2016, NN Group will be able to pay the
consideration of the Offer for an amount of EUR 1.4 billion with cash from
its own available resources. For the remainder, NN Group has, subject to
customary conditions, committed debt financing made available to it from
reputable global financial institutions.

Strategic rationale

NN Group and Delta Lloyd believe that a combination of Delta Lloyd and the
Dutch and Belgian activities of NN Group (the 'Combined Group') is
compelling. The Offer and all transactions contemplated therewith (the
'Transaction') will result in an overall stronger platform within the Benelux
from which to provide enhanced customer propositions and generate shareholder
return:

* Additional scale and capabilities will result in an improved customer
proposition within the Dutch pension market;
* Doubling the size of the non-life insurance business will drive
underwriting results and customer experience;
* The integration of two leading asset management businesses creates
additional scale and expertise;
* Increased size and scale of the banking business, thereby improving the
competitive offering to existing and new customers;
* Doubling the presence in Belgium, leading to a strong life insurance market
share with a more diversified offering through additional channels.

The Combined Group will be better placed to capture opportunities that
technological innovation brings and will provide increased possibilities for
knowledge sharing, strengthening capabilities and talent development. It will
bring a perspective of growth and lead to opportunities for employees of both
companies and will facilitate continuous improvement in customer service and
experience.

Synergies and cash generation

The Offeror currently estimates cost synergies which will reduce the annual
cost base by approximately EUR 150 million pre-tax, expected to be achieved
by 2020. This is anticipated to occur in a range of areas including:

* Integration of operational and supporting activities in Life and Non-life,
including commercial migration
* Full integration of Bank&Asset Management
* Removal of overlap in centralised functions
* Reduction in project spend

The Offeror estimates that approximately half of the cost synergies will be
realised in the Life and Non-life segments, while efficiency improvements in
the Bank&Asset Management businesses will account for approximately 30% of
expected cost synergies. The remainder of cost synergies is expected to be
achieved in centralised functions and other segments.

Based on its due diligence, NN Group believes that there will be some initial
capital synergies from the combination (stemming mainly from diversification
benefits) but also expects meaningful negative impacts from the alignment of
actuarial assumptions under NN Group ownership. Over time, NN Group sees
potential for further capital synergies, the transition of Delta Lloyd's
legal entities onto the NN Group Partial Internal Model, but also the removal
of the longevity hedge benefit currently included in Delta Lloyd's standard
formula approach. NN Group will provide additional information on potential
cost and capital synergies in due course.

Recommendation by Delta Lloyd's Executive Board and Supervisory Board

After due and careful consideration, both the Delta Lloyd Executive Board and
the Delta Lloyd Supervisory Board are of the opinion that the Offer is in the
best interest of Delta Lloyd and its stakeholders. As is further set out in
Delta Lloyd's position statement (the 'Position Statement'), published by
Delta Lloyd today, the Delta Lloyd Executive Board and Delta Lloyd
Supervisory Board support the Offer and the Legal Merger, recommend to the
Shareholders to accept the Offer and to tender their Shares pursuant to the
Offer, and recommend voting in favour of all Offer EGM Resolutions and the
Legal Merger Resolution.

On 23 December 2016, Goldman Sachs issued a fairness opinion to the Delta
Lloyd Executive Board and Supervisory Board, and on 22 December 2016 Bank of
America Merrill Lynch issued a fairness opinion to the Delta Lloyd
Supervisory Board, in each case as to the fairness, as of such date, and
based upon and subject to the factors and assumptions set forth in each
fairness opinion, that the EUR 5.40 in cash to be paid pursuant to the Offer
or the Exchange Ratio of NN Group shares to be issued in connection with the
Legal Merger, as applicable, to the holders of Shares, collectively, is fair
from a financial point of view to such holders.

The full text of these fairness opinions is included in the Position
Statement. The opinions of Goldman Sachs and Bank of America Merrill Lynch
are given to (i) the Delta Lloyd Executive Board and the Delta Lloyd
Supervisory Board and (ii) the Delta Lloyd Supervisory Board, respectively,
and not to the Shareholders. As such, the fairness opinions do not contain a
recommendation to the Shareholders as to whether they should tender their
Shares under the Offer or how they should vote or act with respect to the
Legal Merger or any other matter.

Further undertakings

NN Group and Delta Lloyd have agreed to certain covenants in respect of
corporate governance, post-closing legal merger, strategy, organisation,
integration and employees for a duration of three years after settlement (the
'Non-Financial Covenants').

Delta Lloyd Executive Board
As of the Settlement Date, Mr Abrahams, Ms Mijer and Mr van Riet shall
continue to serve on the Delta Lloyd Executive Board and will ...

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