AEGON sells its UK-based Guardian life and pension business for a total cash consideration of GBP 275m to Cinven, a European private equity group. Guardian, which manages over 300,000 life insurance policies in the UK, has been closed to acquiring new business since 2001. AEGON AM has entered into a long-term agreement with Cinven and will continue to manage the assets of Guardian which total GBP 7.4bn. AEGON Guardian had a book value of GBP 271m (June 2011) and an embedded value of GBP 322m which prices the transaction at 85% of EV. Guardian contributed GBP 23m to pre-tax underlying earnings in 2010. Our View: AEGON considered that managing the closed business of Guardian companies no longer fitswith its strategic objectives. We consider the divestment at book and 15% EV discount as a positive given current market valuations. It also helps to reach the ambitious target of reducing UK cost base by 25%. Conclusion: We remain Accumulating with an unchanged target at € 7.0.