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ING Buying CitiStreet

AMSTERDAM (Reuters) – Dutch financial services group ING Groep NV said on Friday it would buy CitiStreet, a provider of administrative services to the retirement sector primarily in the United States, for 578 million euros ($903 million).

“This acquisition significantly expands our existing footprint in our retirement services businesses in the US and will help drive long-term growth in the U.S. retirement savings marketplace,” said Tom McInerney, chief executive for ING Insurance Americas, in a statement.

ING (ING.AS: Quote, Profile, Research)(ING.N: Quote, Profile, Research) said the acquisition is expected to be yield significant synergies and it will be earnings per share accretive by 2010, excluding merger-related expenses and the amortization of customer-based intangible assets.

The combined operations of ING and CitiStreet will make it the third-largest defined contribution business in the United States with 224 billion euros assets under management and 14 million plan participants.

The deal will be financed entirely from existing internal resources and is expected to close in the third quarter, ING said.

(Reporting by Harro ten Wolde; Editing by David Cowell)