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The head office of Dutch financial insurance company Aegon is seen in The Hague, October 28, 2008.Stringer/Reuters

An insurer owned by the Canada Pension Plan Investment Board is buying Netherlands-based insurance company Aegon N.V.'s Canadian business for $600-million.

Aegon's business, which primarily consists of an individual life insurance provider called Transamerica Life Canada, will be wrapped into U.S. insurance and reinsurance company Wilton Re Ltd. The CPPIB, which manages the assets of the Canada Pension Plan, owns Wilton Re.

The move comes just a few months after the CPPIB deal to buy Conneticut-based Wilton Re for $1.8-billion (U.S.), an acquisition meant to pave the way for other deals, particularly south of the border. The low volatility and predictability of the life insurance sector makes it an attractive business to CPPIB, executives said in March.

The acquisition of Transamerica Life Canada and Aegon's other businesses extends Wilton's Canadian presence with a network of advisers, a block of life insurance policies, annuities, and a closed block of segregated fund policies. The insurance business has a $10.6-billion portfolio of assets as of the end of September, and also includes Canadian Premier Life and Legacy General Insurance Company.

"Wilton Re views the acquisition of the Transamerica Canada businesses as well-aligned with our strategy to provide risk and capital solutions to clients throughout North America," said Chris Stroup, chief executive officer of Wilton Re. "Wilton Re is committed to the middle market, and Transamerica Canada is well positioned to serve the middle market in Canada."

Along with the insurance business, Aegon's Canadian operations included investment firm Aegon Capital Management and mutual fund group Aegon Fund Management.

Aegon's Canadian business was known to be a potential sale target since the company's investor day in June this year, when Aegon said it would review its operations. The company said it wants to be the most recommended life insurance and pension provider in all the countries it operates in by 2015.

Alex Wynaendts, CEO of Aegon, said in a statement Thursday that the performance of the Canadian business no longer supported the company's goal "to become a leader in our chosen markets."

The deal with Wilton Re will be funded in part through the CPPIB and is expected to close in the first quarter of 2015, pending regulatory approval.

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