Fidelity & Guaranty Discussing Another Merger Extension With Anbang
February 7, 2017 by Marie Suszynski,
DES MOINES, Iowa – Fidelity & Guaranty Life is again looking to extend its $1.58 billion merger agreement with Anbang Insurance Group. F&GL’s net income more than doubled during its fiscal first quarter of 2017.
Fidelity & Guaranty’s is in talks with Anbang to extend the termination date of the deal beyond Feb. 8, Chris Littlefield, president and chief executive officer, said in a statement. The insurer expects to make an announcement regarding the merger on Feb. 9.
The merger still needs regulatory approvals from the Iowa Insurance Division, the New York Department of Financial Services and the China Insurance Regulatory Commission. Fidelity & Guaranty and Anbang have received approval from the Vermont Department of Financial Regulation and the Committee on Foreign Investment in the United States.
The companies had previously extended the deal on Nov. 3 and either company could terminate the transaction if it doesn’t close by Feb. 8.
The cash deal with Beijing-based Anbang was announced in November 2015 and was originally scheduled to close during the second quarter of 2016. Terms call for Anbang to pay $26.80 per share, a 28.9% premium (Best’s News Service, Nov. 9, 2015).
If the deal goes through, Anbang would be one of the largest insurers by market share in fixed indexed annuity products in the United States. Fidelity & Guaranty is among the top 10 writers in the fixed indexed annuity market in the United States, according to an A.M. Best Credit Report.
During Fidelity & Guaranty’s fiscal first quarter of 2017, which ended on Dec. 31, 2016, net income climbed 60% to $108 million. Fixed indexed annuity sales rose 26% to $551 million during the quarter. Total annuity sales jumped 33% to $648 million.
Premiums declined 27% to $11 million. Total revenues increased 3% to $340 million.
“We’ve delivered another strong quarter and fiscal 2017 is off to a good start with solid increases in sales, net income, net investment income, adjusted operating income and assets under management,” Littlefield said in the statement.
Going forward, Fidelity & Guaranty should benefit if interest rates continue to rise and the regulatory environment improves under President Trump, he said.
Members of Fidelity & Guaranty Life Group have a current Best’s Financial Strength Rating of B++ (Good).
Shares of Fidelity & Guaranty (NYSE: FGL) were trading at $25.30 on the afternoon of Feb. 6, up 5.20% from the previous close.
(By Marie Suszynski, BestWeek Correspondent: Marie.Suszynski@ambest.com)