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.
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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.
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