Meiji Yasuda Life Insurance has announced a landmark transaction, purchasing Legal & General’s (L&G) U.S. protection business for $2.3 billion in cash. This move will also see Meiji Yasuda acquiring a 5% stake in the British insurance giant, in a historic deal orchestrated under the leadership of L&G’s CEO, António Simões.
L&G’s shares surged by 8% in early trading following the announcement. While the company’s stock performance has generally been on a downward trend in recent years, it has demonstrated a remarkable recovery with a 12% increase year-to-date, outshining broader indices in London and across Europe.
In what has been described as the largest transaction in L&G’s history, Simoes emphasized that this divestiture is aligned with his broader strategy to streamline the company’s operations. This transaction is expected to precede additional, though smaller, asset sales.
A significant aspect of the deal is the strategic partnership between the two firms. Meiji Yasuda is set to acquire a 20% stake in L&G’s burgeoning U.S. pension risk transfer (PRT) business. This collaboration targets the rapidly growing global market, where corporations seek to transfer their pension liabilities to insurers.
L&G has also unveiled plans for an ambitious share buyback programme, valued at £1 billion ($1.2 billion), to be launched post-sale. Simoes characterized Meiji Yasuda’s investment as a “vote of confidence” in L&G, while clarifying that there are no immediate plans for further integration.
Pending regulatory approval, the transaction is anticipated to conclude by the end of 2025. This strategic alliance is poised to leverage synergies between the two companies, capitalizing on opportunities within the U.S. and the global asset management sector.
Post-transaction, L&G will pivot to focus exclusively on retail customers within its home market, a commitment reaffirmed by Simoes. The firm has earmarked £400 million from the transaction proceeds to bolster its U.S. pension risk transfer business.
Last September, L&G sold its UK housebuilder, CALA Group, to an acquisition vehicle led by Sixth Street Partners for £1.35 billion. The company has also strengthened its leadership team with the promotion of Laura Mason to head its retail division and the appointment of Katie Worgan from Lloyds Banking Group as its new chief operating officer.