BY Fraser Tennant
In a transaction valued at $2.7bn, the US’s largest provider of commercial and residential mortgage and diversified services, Fidelity National Finance (FNF) Inc, is to acquire FGL Holdings (F&G), a leading provider of fixed indexed annuities and life insurance.
Under the terms of the merger agreement, holders of F&G's ordinary shares (other than FNF and its subsidiaries) may elect to receive either $12.50 per share in cash or 0.2558 of a share of FNF common stock for each ordinary share of F&G they own. Upon closing of the transaction, F&G shareholders will own approximately 7 percent of the outstanding shares of FNF common stock.
The acquisition of F&G offers FNF entry to an industry that it expects will perform well in economic environments which are challenging for title insurance. “We are excited to announce our plans to acquire F&G Holdings and look forward to welcoming F&G employees and policyholders to the FNF family,” said William P. Foley, II, chairman of FNF. “The board and management diligently reviewed FNF's capital allocation strategy and determined that expanding into the annuity market through the acquisition of F&G Holdings would offer compelling benefit to our shareholders.”
Following the close of the transaction, which has been approved by a special committee of F&G directors, a special committee of FNF directors and the FNF board of directors, F&G will operate as a subsidiary of FNF. “We are pleased to join forces with FNF, a world-class company we know well and respect,” said Chris Blunt, president and chief executive of F&G. “This agreement, which offers immediate value to F&G shareholders and compelling benefits to our stakeholders, will provide a meaningful platform for our business as we continue to build the F&G of the future.”
The transaction is expected to close in the second or third quarter of 2020, subject to the satisfaction of customary closing conditions, including the receipt of regulatory clearances and approval by F&G shareholders.
Mr Blunt concluded: “We are excited to enter into the next phase of growth with FNF and are confident that by combining our complementary businesses, we will be better positioned to carry out our mission of helping customers turn their aspirations into reality.”
News: U.S. insurer Fidelity National to buy FGL Holdings in $2.7 billion deal