L&G to sell US insurance entity to Meiji Yasuda for $2.3bn

Legal & General has agreed to sell its US insurance entity, comprising its US protection and US Pension Risk Transfer businesses, to Meiji Yasuda Life Insurance Company, a Japanese mutual life insurance company, for an equity value of $2.3 billion.

Following completion, Meiji Yasuda will reportedly own L&G’s US protection business and have a 20% economic interest in its US PRT business, with L&G retaining 80% of existing and new PRT through reinsurance arrangements between L&G and Meiji Yasuda.

As Reinsurance News understands, the deal is expected to be completed towards the end of 2025 and is subject to customary closing conditions and regulatory approvals.

The two firms have additionally announced the formation of a long-term strategic partnership to support L&G’s growth ambitions in US PRT and asset management.

L&G revealed that approximately £400 million of the proceeds will be used to fund the US PRT reinsurance arrangement described above, while the remainder will be deployed in line with its capital allocation framework.

In line with that framework, subject to market conditions and regulatory approval, L&G intends to return £1 billion to shareholders, which represents more than half of the transaction proceeds.

António Simões, Group CEO of Legal & General, commented, “This is a transformative transaction that brings significant strategic and financial benefits to the Group and demonstrates our commitment to deliver on our strategy – sharpening our focus on core businesses, leveraging the synergies between them, and driving sustainable growth to enhance shareholder returns.

“This strategic partnership brings together two highly complementary global businesses, with a shared ambition for growth, and will enable us to capitalise on the large market opportunities in US Pension Risk Transfer while driving scale and profitability in global asset management.

“Today’s announcement reflects our commitment to value creation and shareholder returns as we expect to distribute c. 40% of our market cap through dividends and share buybacks over the next three years.”

Hideki Nagashima, President and Group CEO of Meiji Yasuda Life, added, We are pleased to announce this landmark transaction, which will accelerate Meiji Yasuda’s international growth strategy – strengthening our position in the US life insurance market, deepening our long-standing partnership with L&G in asset management, and enabling access to the US PRT market, where we will benefit from L&G’s market-leading expertise to unlock sustainable growth together.

“Our intention to acquire a 5% shareholding in L&G reflects our confidence in their leadership, strategy and long-term prospects.”

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