LONDON (dpa-AFX) - Legal & General Group (LGEN.L) announced the sale of its US protection business to its longstanding partner Meiji Yasuda for a valuation of $2.3 billion. Alongside this transaction, the two companies will form a long-term strategic partnership.
Legal & General Group will sell its US insurance entity, comprising its US protection and US Pension Risk Transfer or 'US PRT' businesses, to Meiji Yasuda Life Insurance Company, a Japanese mutual life insurance company, for an equity value of $2.3 billion or 1.8 billion pounds payable in cash at completion. Following completion, Meiji Yasuda will own L&G's US protection business and have a 20% economic interest in its US PRT business, with L&G retaining 80% of existing and new PRT through reinsurance arrangements between L&G and Meiji Yasuda.
The Transaction is expected to complete towards the end of 2025.
Legal & General Group also announced the formation of a long-term strategic partnership with Meiji Yasuda to support L&G's growth ambitions in US PRT and asset management.
Meiji Yasuda intends to acquire about 5% shareholding in L&G. Meiji Yasuda will expand its established partnership with L&G in asset management by outsourcing the investment management of US PRT and protection assets to L&G. In addition, the two companies will form a long-term partnership in global private assets. This will include significant co-investment into L&G's range of private assets capabilities over several years.
Legal & General Group anticipates an additional share buyback of 1.0 billion pounds following completion of the transaction and now expects to return the equivalent of 40% of its market cap to shareholders over 2025-2027 through a combination of dividends and buybacks.
The company reiterated the guidance for full year 2024 of mid-single digit growth in core operating profit. It confirmed that it is on track to achieve the Group targets set out at the Capital Markets Event (CME), which include a 6-9% compound annual growth rate (CAGR) in core operating earnings per share for 2024-2027, over 20% operating return on equity (ROE) for the years 2025, 2026, and 2027, and cumulative Solvency II capital generation of 5 billion pounds -6 billion pounds over the three-year period from 2025 to 2027.
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