L&G to sell US protection business to Meiji Yasuda Insurance

LONDON: Legal & General Group Plc (L&G) has agreed to sell its U.S. protection business to longstanding partner Meiji Yasuda Life Insurance Company, forming a strategic partnership to enhance its U.S. Pension Risk Transfer (PRT) business.

The transaction, valued at $2.3 billion, is expected to close towards the end of 2025, pending regulatory approvals.

The deal includes Meiji Yasuda acquiring a 20% stake in L&G’s U.S. PRT business and approximately a 5% shareholding in L&G.

This partnership aims to grow L&G’s presence in the U.S. PRT market and expand Meiji Yasuda’s footprint in the U.S. insurance sector.

L&G plans to use the proceeds from the sale to fund reinsurance arrangements, capital allocation, and shareholder returns.

The company anticipates an additional share buyback of £1.0 billion following completion and expects to return around 40% of its market cap to shareholders over 2025-2027 through dividends and buybacks.

L&G Group CEO António Simões and Group CFO Jeff Davies will host a virtual investor presentation at 9 a.m. on February 7, 2025.

“This transformative transaction aligns with our strategy to focus on core businesses, drive sustainable growth, and enhance shareholder returns,” said Simões.

Meiji Yasuda President Hideki Nagashima expressed confidence in the partnership, highlighting its potential to accelerate the company’s international growth strategy.

The transaction will boost L&G’s Solvency II ratio by approximately 22% at completion and 7% post-buyback. The company reiterates its mid-single-digit growth target for core operating profit in 2024 and remains confident in achieving its long-term goals.

Legal & General Group Plc is a leading financial services company with a focus on asset management, institutional retirement, and UK retail.

Meiji Yasuda Life Insurance Company is a prominent Japanese mutual life insurance company, committed to international growth and expansion.