August 2021 Stock Markets and Funds Overview -- Our Site
In a significant move for the banking industry, Goldman Sachs has announced the acquisition of NN Investment Partners (NNIP), the investment arm of Dutch insurer NN Group, for approximately €1.6 billion. The deal, which was announced on August 19, 2023, represents a strategic expansion of Goldman Sachs' European operations.
According to classic value criteria, both Goldman Sachs and NN Group's stocks are currently trading at bargain levels. However, the price-to-book ratio for NN Group is significantly lower than that of Goldman Sachs, with NN Group boasting a ratio of 0.3, compared to Goldman Sachs' 1.1. Conversely, the price-to-earnings ratio for NN Group is higher than that of Goldman Sachs, with NN Group's ratio standing at 8.6, compared to Goldman Sachs' 7.6.
The acquisition is not expected to involve significant restructuring, implying a smooth integration of NNIP into Goldman Sachs' operations. Goldman Sachs views NNIP as a key pillar for its European operations, suggesting it intends to maintain the business as a functioning entity. The plan for the companies to work together long-term seems well-thought-out.
Goldman Sachs will manage assets worth around €162 billion for NN Group. This acquisition gives Goldman Sachs a fully functioning business, including distribution, in Europe. The brief dip in stock prices following the announcement was likely due to the overall market downturn on the same day.
NN Group shareholders may appreciate the company focusing on its core business of insurance. With the sale of NNIP, NN Group can now channel its resources towards strengthening its insurance operations. The dividend yield for NN Group is a generous 5.5%.
The acquisition of NNIP by Goldman Sachs is not generally viewed as a negative event by shareholders, as indicated by the minimal impact on stock prices. This suggests that shareholders view the acquisition as a positive move for both companies.
It is worth noting that on August 19, an announcement was made regarding the purchaser of NN Investment Partners' shares for approximately 1.6 billion euros, but the specific buyer's name is not provided.
In conclusion, the acquisition of NN Investment Partners by Goldman Sachs is a strategic move that will strengthen Goldman Sachs' European operations and provide NN Group with the opportunity to focus on its core business. The smooth integration of NNIP into Goldman Sachs' operations, combined with the positive response from shareholders, indicates a promising future for both companies.
