U.K. firm L&G agrees to transfer its U.S. insurance division to Meiji Yasuda for a sum of $2.3 billion, forging a strategic alliance.
Meiji Yasuda Strengthens Partnership with Legal & General in Landmark Deal
In a significant move, Legal & General (L&G) has agreed to sell its US insurance entity, including its US protection and US Pension Risk Transfer (PRT) businesses, to Meiji Yasuda Life Insurance Company for $2.3 billion. This transaction, subject to regulatory approvals and customary closing conditions, is expected to close towards the end of 2025.
Meiji Yasuda will assume ownership of L&G's US protection business and hold a 20% economic interest in L&G's US PRT business. This acquisition aims to strengthen the corporate relationship between the two companies and align their interests.
As part of the deal, Meiji Yasuda will expand its partnership with L&G in asset management by outsourcing the investment management of US PRT and protection assets to L&G. The companies also plan to form a long-term partnership in global private assets, with significant co-investment into L&G's private assets capabilities.
The sale is part of L&G's strategy to streamline operations and improve its business model. Approximately £400 million of the transaction proceeds will be allocated to fund the US PRT reinsurance arrangement. L&G also plans to return approximately 40% of its market capitalization to shareholders between 2025 and 2027, through a combination of dividends and buybacks. Subject to market conditions, L&G plans to return £1 billion to shareholders via share buybacks.
The Group CEO of Legal & General considers the deal as a "transformative transaction" that brings strategic and financial benefits to the group. Meiji Yasuda's President and Group CEO views the transaction as an opportunity to strengthen Meiji Yasuda's position in the US life insurance market, deepen their partnership with L&G in asset management, and enable access to the US PRT market.
This news comes at a time when L&G has been committed to ramping up its PRT business and merging its asset management arms, following challenges in its share price over the past three years. The acquisition by Meiji Yasuda is expected to bolster L&G's position in the US insurance market and provide a solid foundation for future growth.
However, the search results do not contain information about which companies are buying Legal & General's US insurance activities for $2.3 billion. This article will be updated as more information becomes available.
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