Dutch Firm to Purchase Providian Unit

Dutch insurer Aegon said it is buying the insurance business of Providian Corp. for $2.62 billion in stock--the biggest acquisition in the U.S. life insurance industry. The deal is the latest in a rapidly consolidating global industry pressured by high costs and tough competition from banks and mutual funds all chasing consumer savings. As part of the deal, Providian Bancorp--which issues Visa credit cards and writes second mortgages and secured credit card loans--would be spun off as an independent banking company. Aegon said the deal, which would make it one of the top three European insurance companies and 11th-biggest in the U.S., would be a tax-free stock transaction providing Providian shareholders $28 for each share they own, for a value of about $2.62 billion. Aegon’s New York Stock Exchange-traded shares jumped $5.875 to $62.875. Providian shares fell $1.125 to $51.625 on the NYSE.