J.C. Penney Sells Marketing Business
Mar. 08, 2001
PLANO, Texas (AP) _ J.C. Penney Co. Inc. on Thursday agreed to sell its direct marketing and life insurance businesses to Dutch insurer Aegon NV for $1.3 billion in cash.
The sale of J.C. Penney Direct Marketing Services Inc. and J.C. Penney Life Insurance will allow the Plano-based company to focus on its retail stores, chief executive Allen Questrom said.
Aegon and Penney also announced a 15-year strategic alliance to offer financial products and membership services to Penney's 12 million customers. As part of the alliance, Penney will get cash payments from Aegon over the next 15 years worth about $300 million.
Penney closed 45 stores last year and announced in January that it would close another 47 stores and catalog centers and cut about 5,500 jobs.
Aegon, one of the largest foreign insurers in the United States, hopes to complete the deal in the second quarter. It purchased Transamerica for nearly $10 billion in 1999, making it one of the world's 10 top life insurers.
Aegon employs 24,000 people worldwide, also released its earnings for 2000 on Thursday. Net profit rose 32 percent to 2.07 billion euros ($1.86 billion) from 1.57 billion euros a year earlier, citing acquisitions and the strong dollar and pound for helping boost its results.
Penney shares were up 62 cents to $17.61 in midday trading on the New York Stock Exchange. Shares of Aegon were down 54 cents to $32.90 on the NYSE.
On the Net:
J.C. Penney Co. Inc.: http://www.jcpenney.com
Aegon NV: http://www.aegon.com