(Bloomberg) — Legal & General Group Plc agreed to sell its US insurance entity for $2.3 billion, the latest move by Chief Executive Officer António Simões to revamp the financial services firm and boost payouts to shareholders.
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The US insurance entity, which comprises the firm’s local protection and pension risk-transfer businesses, will be sold to Meiji Yasuda Life Insurance Co., according to a statement on Friday. Following completion, the Japanese insurer will own L&G’s US protection business and have a 20% economic interest in its US PRT business. Meiji Yasuda also plans to buy a 5% stake in L&G.
London-based L&G will use £1 billion ($1.24 billion) of the proceeds for share repurchases. Another £400 million will be spent to fund a US PRT reinsurance arrangement with Meiji Yasuda in which the UK insurer will retain 80% interest.
L&G shares surged as much as 11.4% in early London trading, the biggest intraday gain since November 2020.
“This is a transformative transaction that brings significant strategic and financial benefits to the group,” sharpening L&G’s focus on core businesses and “driving sustainable growth to enhance shareholder returns,” CEO Simões said in the statement.
Simões, who took the helm at L&G about a year ago, has unveiled a new strategy for the company that envisioned merging its asset management units and scaling up private-market and higher fee-paying assets. As part of the sweeping changes,…
