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Legal & General has struck a deal to sell its US insurance business to Japan’s Meiji Yasuda for $2.3bn as chief executive António Simões moves to overhaul the insurer.
The Japanese insurer will also acquire a stake of about 5 per cent in L&G, the FTSE 100 group said on Friday.
Shares in L&G rose as much as 8 per cent in early trading in London on Friday after it announced the deal and signalled that it would buy back an extra £1bn of shares after the sale has completed.
The insurer said it planned to return 40 per cent of its £15bn market capitalisation to shareholders over the next three years through a combination of dividends and share buybacks.
“This is the largest transaction in our corporate history and in line with our strategy to deliver excellent shareholder value,” Simões said on Friday.
The sale is the chief executive’s latest move to slim down the group since joining last year from Spanish bank Santander. L&G sold its UK housebuilder Cala in a £1.4bn deal last year.
Simões said on Friday that the sale of the US business would allow the company to strengthen its pension risk transfer and asset management divisions in the country.
As part of the deal Meiji Yasuda plans to take a 20 per cent stake in L&G’s US pension risk transfer business as well as a 5 per cent stake in L&G.
