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Fidelity National Financial Inc. may be about to become a major player in the U.S. annuity market.
The Jacksonville, Florida-based title insurer has agreed to pay $12.50 per share, or a total of $2.7 billion in cash and Fidelity National stock, for FGL Holdings — the Des Moines, Iowa-based company that owns Fidelity & Guaranty Life Insurance Company.
The deal agreement calls for Fidelity National to leave FGL's headquarters in Des Moines, with the current management team in place, and with an arm of Blackstone continuing to serve as the company's investment manager.
Resources
- A link to a packet of FGL SEC filings related to the deal is available here.
- A link to a copy of the deal agreement is available here.
- A link to an article about FGL's new offices in Des Moines is available here.
William Foley II, Fidelity National's chairman, said in a comment about the deal that the company looked at FGL after the proposed acquisition of another company, Stewart Information Services, fell through.
The Fidelity National board and management "determined that expanding into the annuity market through the acquisition of F&G Holdings would offer compelling benefit to our shareholders," Foley said.
In a slidedeck prepared for a presentation for Fidelity National shareholders, Fidelity National said that FGL has a business with strong growth tailwinds, or favorable trends, and that FGL has a superior management team and a unique relationship with Blackstone.
Fidelity National will be able to accelerate FGL's growth by using its own financial strength to improve FGL's financial strength ratings, which will expand FGL's ability to do business through the broker-dealer and bank channels, according to Fidelity National.
The Companies
Fidelity National is large provider of title insurance and transaction services for the real estate and mortgage industries. The company's list of underwriters includes Chicago Title, Commonwealth Land Title and National Title of New York.
Fidelity & Guaranty, the company at the heart of FGL, was founded in 1959.
Old Mutual PLC, a London-based financial services company, owned the company from 2001 through 2011, then sold it to the Harbinger Group.
In 2013, FGL issued stock to the public and became a stand-alone company.
