Legal & General Surges: Announces Sale of US Protection Business and New Strategic Partnership

Legal & General (LON: LGEN) shares surged Friday after the company announced the $2.3 billion sale of its US protection business to Japan’s Meiji Yasuda, alongside a strategic partnership to expand its US Pension Risk Transfer (PRT) and asset management operations. 

LGEN initially rallied to a high of 266.2p following the news. At the time of writing, it is up more than 7% at 255.9p a share. The company also revealed plans for a £1.0 billion share buyback upon completion of the deal.

Under the agreement, Meiji Yasuda will acquire L&G’s US protection business and take a 20% stake in its US PRT business, with L&G retaining the remaining 80% through reinsurance arrangements. The deal is expected to be finalised by late 2025.

WELCOME BONUS - Free Share Bundle When You Invest £50! Get up to £500 cashback for investing with IG.

Invest in 15,000+ shares and ETFs. Open an account now, invest at least £50, and you’ll get a free share bundle worth between £40 and £200. T&Cs apply.

5.0

Open Account Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

As part of the strategic partnership, Meiji Yasuda also intends to acquire a 5% stake in L&G and expand its asset management collaboration with the British insurer. 

L&G will manage US PRT and protection assets for Meiji Yasuda, while both firms plan to co-invest in private assets globally.

L&G CEO António Simões called the transaction “transformative”, stating, “This strategic partnership brings together two highly complementary global businesses, with a shared ambition for growth.” 

He emphasised that the sale aligns with L&G’s strategy to focus on core businesses and return significant capital to shareholders, with approximately 40% of its market cap set to be distributed via dividends and buybacks between 2025-2027.

Meiji Yasuda CEO Hideki Nagashima added that the “landmark transaction” strengthens their position in the US life insurance market and deepens the company’s long-standing partnership with L&G.

The deal is expected to increase L&G’s Solvency II ratio by 22% and contribute £1.2 billion in capital generation, further supporting its long-term growth strategy.