On Thursday, Aegon (NYSE:AEG) NV said smaller competitor ASR Nederland is going to purchase its Dutch insurance operations in a cash and shares deal worth around 4.9 billion euros (USD 4.93 billion). This deal would see ASR replace it as the country’s second-largest insurance company.

Aegon is likely to receive 2.5 billion euros (USD 2.52 billion) and a 29.99 per cent stake in ASR Nederland, worth 2.4 billion euros at Wednesday’s closing price. The particular deal would create a strong competitor for top Dutch insurer NN Group. It must be approved by regulators and shareholders. The firms said they expected it to close by the second half of 2023. The companies said that the combined firm is going to be the largest in the Dutch disability insurance sector. It is also going to be number three in property and casualty insurance.

Based in the Netherlands, Aegon does most of its business in the US under the Transamerica brand. The company said it would return 1.5 billion euros to stakeholders and use about 700 million euros to reduce leverage.

Shares in Aegon rose 7.5 per cent by 0733 GMT while ASR gained 6 per cent.