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CF Corporation to buy Fidelity & Guaranty Life for $1.8bn

IBR Staff Writer Published 26 May 2017

CF Corporation has agreed to acquire US-based insurance firm Fidelity & Guaranty Life (FGL) for around $1.83bn.

Based in Des Moines of Iowa, FGL provides fixed indexed annuities and life insurance products to the customers in the US.

Through its subsidiaries, the company mainly provides its products to the middle-income Americans. The company currently includes around 700,000 policyholders.

The deal included the payment of 31.10 per FGL share in cash, in addition to assuming $405m of existing debt.

FGL, which includes around $28bn of GAAP total assets, has about $1.6bn of adjusted book value.

The company will also continue to carry out operations from Baltimore of Maryland and Lincoln of Nebraska.

Once the deal concludes, FGL will be continued to be managed by its current management team under Chris Littlefield as president and CEO.

Littlefield said: “We believe the expertise and insights that our leading investors will bring as new shareholders of FGL will greatly benefit the company, our policy owners, distribution partners, agents and employees.”

In addition, Messrs. Chu and Foley will act as executive chairmen of the board that will include mostly independent directors.

Foley said: "This is an exciting transaction that we expect will enable us to generate attractive returns for our shareholders by accelerating FGL's growth and profitability through efficient structuring and improved investment management capabilities.

Subject to regulatory approvals and other customary closing conditions, the deal is expected to complete in the fourth quarter of this year.

Image: FGL provides fixed indexed annuities and life insurance products in the US. Photo: courtesy of fantasista / FreeDigitalPhotos.net.