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(Updates with background, analyst comment)
AMSTERDAM, May 23 (Reuters) - Britain's Legal & GeneralGroup said on Monday it will buy 3 billion pounds ($4.4billion) of annuity liabilities from Dutch insurer Aegon.
Although the terms were not disclosed, analysts said L&Gappears to have sealed a sweet deal, probably driven by Aegon'sdesire to improve its solvency ratio.
Aegon will book a 215 million pound (273 million euro) losson the deal, but it will improve its group solvency ratio by 3percentage points or more due to relatively heavy capitalrequirements for annuities under Europe's new Solvency II rules.
"Aegon wishes to offload the annuity book to fit with itsstrategy, so we expect L&G was able to drive an attractiveprice," RBC Europe analyst Gordon Aitken said in a note.
L&G shares were up 0.9 percent by mid-morning, while Aegonshares were off 0.7 percent.
Aegon's stock fell as much as 10 percent on May 12 when itreported first-quarter earnings showing company-wide solvencyunder Solvency II falling to 155 percent from 160 percent..
Many analysts view the Solvency II ratio as a proxy for aninsurer's ability to pay dividends.
Aegon said Monday's deal completes the divestment of itsBritish annuities portfolio, "in line with the company'scontinued shift to capital-light businesses."
In April, Aegon sold Rothesay Life 6 billion pounds ($8billion) of UK annuities. ($1 = 0.6886 pounds)
(Reporting by Toby Sterling; Editing by David Goodman andAdrian Croft)
