Date
19 November 2017
Anbang Insurance has struggled to win regulatory approval for its deal to purchase Fidelity & Guaranty Life. Photo: Reuters
Anbang Insurance has struggled to win regulatory approval for its deal to purchase Fidelity & Guaranty Life. Photo: Reuters

FGL terminates US$1.6 bln Anbang deal

Fidelity & Guaranty Life terminated its US$1.6 billion agreement to be purchased by China’s Anbang Insurance Group Co. and said it will weigh other possible deals, Reuters reports.

FGL’s board “is continuing to evaluate strategic alternatives to maximize shareholder value and has received interest from a number of parties”, the company was quoted as saying in a statement on Monday.

“FGL has no remaining obligations under the merger agreement and may enter into an alternative transaction.”

The US insurer agreed in 2015 to the Anbang deal at a price of US$26.80 a share.

But Anbang struggled to win regulatory approval, and valuations of US life insurers climbed, giving Des Moines, Iowa-based FGL incentive to find a new buyer.

Under terms of a February amendment, FGL was permitted to cancel the agreement on Monday.

Athene Holding Ltd., the annuity seller with ties to Apollo Global Management LLC, has been weighing a plan to pursue FGL, people familiar with the plan said in February.

“We believe Athene is the favorite to buy FGL, assuming the Anbang deal breaks,” analysts led by Ryan Krueger at Keefe Bruyette & Woods said in a note to clients.

FGL’s stock has been trading above the deal price for weeks, closing at US$27.95 Monday.

The insurer is majority owned by HRG Group Inc., a holding company that counts Leucadia National Corp. as its top shareholder.

Anbang hasn’t followed through recently with plans for major expansion in the United States.

A year ago, a group led by Anbang withdrew a US$14 billion takeover for Starwood Hotels and Resorts Worldwide Inc., citing “various market considerations”.

Last October, Anbang called off a deal to buy a landmark Southern California hotel from Blackstone Group LP after US national security officials expressed concern over the property’s proximity to a naval base.

Last month, Anbang abandoned talks with the family of Jared Kushner, President Donald Trump’s son-in-law and a White House special adviser, to redevelop a Manhattan office tower, after lawmakers cited potential conflicts of interest.

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CG

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