ABN AMRO to pay Ageas $498 million to end legal proceedings

Dutch state-owned bank ABN AMRO today said that it will pay €400 million ($498 million) to Belgian insurer Ageas, formerly Fortis, to settle a legal proceedings.

Amsterdam-based ABN AMRO was partly acquired by Dutch-Belgian group Fortis in 2007, and was nationalised a year later by the Dutch government after Fortis was bailed out by The Netherlands, Belgium, and Luxembourg with a €11.2 billion infusion.

Ageas, a former part of Fortis' insurance operations, had claimed €2 billion from ABN AMRO since the convertible securities owned by a Fortis unit had become part of ABN AMRO.

ABN AMRO said that the dispute was related to the preference shares of ABN AMRO Capital Finance Ltd (AACF) and the Mandatory Convertible Securities  (MCS) being issued in 1999 and 2007 respectively by entities that belonged to the former Fortis group.

Following the break-up of the former Fortis group there was no agreement on whether and / or how to share the cost of conversion of these instruments among the entities involved. In 2009 Ageas made a €362.5-million cash payment for disputes relating to AACF and in 2010, Ageas converted the MCS into Ageas shares.

Ageas initiated two legal proceedings in the Netherlands regarding these disagreements.