China’s Anbang Group Acquires US-Based Top-10 Annuity Writer Fidelity & Guaranty
November 10, 2015 by Dennis Gorski, managing editor-online, BestWeek: Dennis.Gorski@ambest.com
DES MOINES, Iowa – Beijing-based Anbang Insurance Group has entered into a merger agreement to acquire Fidelity & Guaranty Life. Total value of the transaction was not disclosed.
Terms call for Anbang to pay $26.80 per share, a 28.9% premium, the companies said in a joint statement. The deal is scheduled to close in the second quarter of 2016, a company spokeswoman told Best’s News Service.
The transaction will make Anbang one of the largest insurers by market share in fixed indexed annuity products in the United States, the statement said. Fidelity & Guaranty wrote $2.52 billion in direct individual annuity premiums in 2014, according to BestLink, comprising 85.3% of its total premiums for the year. Fidelity & Guaranty is a top 10 writer of fixed index annuities in the United States, according to BestLink.
Anbang said the purchase “is consistent with Anbang’s investment strategy, which is focused on globalization.” The company in recent months has acquired several companies, such as an insurance and banking group in The Netherlands (Best’s News Service, July 28, 2015), a banking unit in Belgium (Best’s News Service, July 20, 2015) and a majority stake in a South Korea insurance group (Best’s News Service, June 17, 2015.) Anbang also paid $1.95 billion for New York’s landmark Waldorf-Astoria Hotel (Best’s News Service, Oct. 6, 2014).
Fidelity & Guaranty’s current majority owner, New York-based holding company HRG Group, “strongly” supports the deal, the statement said. “FGL has been a terrific investment for us and we are happy that FGL has found an ideal new home with Anbang,” stated Omar Asali, president and chief executive officer, said. HRG has held its stake in Fidelity & Guaranty since 2011.
Anbang Insurance Group has a global network of more than 30 million customers and more than 30,000 employees, the statement said.
The operating members of Fidelity & Guaranty Life Group have a current Best’s Financial Strength Rating of B++ (Good).
In morning trading Nov. 9, shares of Fidelity & Guaranty (NYSE:FGL) were $25.79, down 1.64% from their previous close.
