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Legal & General Group PLC (LSE:LGEN) has confirmed the sale of its UK housebuilding subsidiary, CALA Group, following months of speculation. The transaction, valued at £1.35 billion, involves a buyer controlled by investment firms Sixth Street Partners and Patron Capital.
Speculation regarding the sale first emerged in March, when it was suggested that CALA could command a valuation around £1 billion. They noted that such a sale would align with Legal & General’s broader strategy to streamline its operations.
António Simões, chief executive of Legal & General, commented on the announcement, stating, “This transaction demonstrates continued momentum in executing our strategy, simplifying our portfolio to enable a sharper focus on our core, synergistic businesses.” He highlighted that CALA has been a significant part of the company for over a decade, with profits increasing tenfold since the initial investment in 2013. The sale is positioned to provide capital that will support Legal & General's strategic goals, emphasizing sustainable growth and enhanced returns for shareholders.
Kevin Whitaker, chief executive of CALA, expressed optimism about the acquisition, stating, “Today's announcement is excellent news for CALA. The acquisition by Sixth Street Partners and Patron Capital demonstrates confidence in CALA's business plan and growth, as our talented team continues to build high-quality, sustainable new homes throughout the UK.”
The transaction is anticipated to close by the end of the year, marking a significant transition for both Legal & General and CALA Group. As the sale progresses, stakeholders will be monitoring the implications for both companies and the future direction of CALA under its new ownership. The strategic move reflects Legal & General's ongoing efforts to refine its portfolio and focus on its core business areas.
