Legal & General Group agreed to sell its U.S. protection entity, which includes its local pension risk transfer business, to Japanese life insurer Meiji Yasuda in a $2.3 billion deal.
L&G will retain 80% of existing and new pension risk transfers through a reinsurance arrangement between the U.K.-headquartered insurer and Meiji Yasuda, a stock exchange announcement said. About £400 million ($488 million) of the deal proceeds will be used to fund that reinsurance arrangement.
The two insurers will work to grow the U.S. pension risk transfer business through a strategic partnership, the announcement added. L&G said in November it had completed $2.2 billion of pension risk transfer business in the U.S. in 2024.
Meiji Yasuda intends to acquire about 5% of L&G under the deal. The two will also expand their existing partnership in asset management through the outsourcing of the investment management of Meiji Yasuda’s U.S. pension risk transfer and protection assets to L&G.
L&G and Meiji Yasuda will also form a long-term partnership in global private assets, with significant co-investment into L&G’s capabilities over several years.
The deal is set to complete toward the end of this year, subject to closing conditions and regulatory approvals.
At its capital markets day in June, L&G set out a refreshed strategy, outlining focuses on three businesses: asset management, institutional retirement, and U.K. retail.
“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,” Antonio Simoes, group CEO of L&G, said in the announcement. “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 U.S. pension risk transfer while driving scale and profitability in global asset management.”
The deal strengthens Meiji Yasuda’s position in the U.S. life insurance market, deepens a long-standing partnership with L&G in asset management, and gives the insurer “access to the U.S. PRT market, where we will benefit from L&G’s market-leading expertise to unlock sustainable growth together,” Hideki Nagashima, president and group CEO of Meiji Yasuda Life Insurance Co., said in the announcement. “Our intention to acquire a 5% shareholding in L&G reflects our confidence in their leadership, strategy and long-term prospects.”
