Published On: Sun, Feb 9th, 2020

Fidelity National Financial to acquire life insurance group FGL Holdings

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Fidelity acquisition of FGL : US title insurance company Fidelity National Financial (FNF) has signed a deal to acquire fixed indexed annuities and life insurance company FGL Holdings (F&G), as per the latest insurance acquisition news.

The US title insurer already owns a stake of 7.9% in FGL Holdings, and the deal to take full ownership at $12.5 per share values the latter at about $2.7 billion.

Domiciled in the Cayman Islands, FGL Holdings is a family of insurance companies –F&G Life Insurance Company – an Iowa-based annuity and life insurance company, F&G Life Insurance Company of New York, and Bermuda-based reinsurer F&G Re.

Fidelity National Financial, on the other hand, which is based in Florida, serves the real estate and mortgage industries with title insurance and transaction services.

The company, which claims to be the largest title insurance company in the US, operates through its title insurance underwriters – Fidelity National Title, Chicago Title, Commonwealth Land Title, National Title of New York, and Alamo Title.

The title insurance company said that the acquisition of FGL Holdings enables its entry to an industry that has strong secular growth tailwinds which is likely to do well in economic environments that are challenging for title insurance.

The deal also diversifies cash and income streams away from title insurance, said Fidelity National Financial.

Raymond Quirk – Fidelity National Financial CEO, commenting on Fidelity acquisition of FGL, said: “Through our minority ownership position in F&G, we have come to know the business well and have developed great respect for Chris Blunt, F&G’s president and CEO.

“We believe FNF’s size, scale, and financial strength will offer significant advantages to Chris and the management team as they continue to lead F&G.  We see incredible potential in working with the management team to invest in and grow F&G’s business on a national level.”

Fidelity acquisition of FGL : Fidelity National Financial to acquire life insurance group FGL Holdings

Fidelity acquisition of FGL : Fidelity National Financial to acquire life insurance group FGL Holdings. Photo courtesy of Gerd Altmann from Pixabay.

As per the terms of the merger deal, FGL Holdings’ shareholders can opt to receive 100% cash or 0.2558 of Fidelity National Financial shares in exchange for each of their shares.

The total consideration to be paid by Fidelity National Financial will be made up of nearly 60% cash and 40% of shares.

Upon closing of the Fidelity, FGL merger, shareholders of FGL Holdings will own around 7% of Fidelity National Financial’s common stock.

Commenting on Fidelity acquisition of FGL, Chris Blunt said: “This agreement, which offers immediate value to F&G shareholders and compelling benefits to our stakeholders, will provide a meaningful platform for our business as we continue to build the F&G of the future.

“We are excited to enter into the next phase of growth with FNF and are confident that by combining our complementary businesses, we will be better positioned to carry out our mission of helping customers turn their aspirations into reality.”

Fidelity acquisition of FGL is subject to regulatory approvals, FGL Holdings’ shareholders’, and satisfaction of other customary closing conditions, following which it is likely to close in Q2 or Q3 2020.

Post-merger, FGL Holdings will operate as a Fidelity National Financial subsidiary and is likely to retain its headquarters in Des Moines, Iowa.

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