Legal & General Group plc (L&G) has agreed to sell its U.S. protection business to Meiji Yasuda Life Insurance Co. for $2.3bn. The deal establishes a long-term partnership between the two insurers.
L&G will also form a strategic partnership with Meiji Yasuda to expand its U.S. pension risk transfer (PRT) business. Under the agreement, Meiji Yasuda will acquire a 20% stake in L&G’s U.S. PRT operations, while L&G will retain 80% of both existing and new PRT through reinsurance agreements.
The Japanese mutual insurer will also take a 5% stake in L&G and strengthen its asset management collaboration with the company. Approximately £400mn of the sale proceeds will fund a U.S. PRT reinsurance arrangement, while the remaining funds will be allocated based on L&G’s capital strategy.
The transaction is expected to close by late 2025, pending regulatory approvals and standard closing conditions.
L&G CEO AntĂłnio Simões said the deal offers strategic and financial advantages, aligning with the company’s focus on key business areas and improving shareholder returns. He highlighted the partnership’s role in expanding U.S.
PRT opportunities while increasing scale and profitability in global asset management.
Meiji Yasuda will expand its established partnership with L&G in asset management by outsourcing the investment management of U.S. PRT and protection assets to L&G.
The new long-term partnership in global private assets will include co-investment into L&G’s range of private assets capabilities over several years.
Following the deal’s completion, L&G plans an additional ÂŁ1.0bn share buyback. The company now expects to return about 40% of its market capitalization to shareholders from 2025 to 2027 through dividends and buybacks.
L&G will manage U.S. PRT and protection assets for Meiji Yasuda, expanding their asset management partnership. The companies also plan a long-term collaboration in private assets, with co-investments over several years.
L&G stated that the transaction supports its long-term strategic objectives outlined last June. The company remains committed to international expansion, with a focus on U.S. PRT and global asset management, while enhancing shareholder returns. The capital generated will support growth across its asset management, institutional retirement, and U.K. retail businesses.
L&G’s 2024 earnings forecast remains unchanged, projecting mid-single-digit growth in core operating profit. Institutional retirement and asset management targets are also expected to hold.
The company will update its retail business targets in late 2025 to reflect the U.S. protection business sale.
L&G estimates the U.S. protection business will generate about $90mn in operating profits for 2024, up from $34mn in 2023. The businesses being sold are expected to have U.S. statutory net assets of about $850mn.
L&G noted continued progress on its strategy, citing senior management changes, the sale of Cala, and a strategic investment in Taurus Investment Holdings.
