AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Strategic Sale: L&G sells US insurance business to Japan’s Meiji Yasuda for $2.3bn (£1.8bn).
- Capital Return & Growth: £1bn to be returned to shareholders; funds to support L&G’s core businesses.
- Long-Term Partnership: Meiji Yasuda to acquire 5% stake in L&G, expanding asset management collaboration.
Legal & General Group Plc (LSE:LGEN) has announced the sale of its US insurance entity, including its US protection and US Pension Risk Transfer (US PRT) businesses, to Meiji Yasuda Life Insurance Company for $2.3 billion (£1.8 billion). The transaction is expected to close by the end of 2025, pending regulatory approvals and standard closing conditions.
Under the agreement, Meiji Yasuda will acquire L&G’s US protection business outright and take a 20% economic stake in its US PRT business, while L&G will retain the remaining 80% through a reinsurance arrangement. The equity value of $2.3 billion reflects a strong valuation multiple based on estimated 2024 post-tax earnings.
Strengthening Strategic Partnerships
Alongside the sale, L&G and Meiji Yasuda have established a long-term strategic partnership aimed at accelerating growth in the US PRT and asset management sectors. As part of this collaboration:
- Meiji Yasuda will acquire approximately 5% of L&G’s shareholding, reinforcing corporate ties and aligning interests.
- The two firms will work together to expand L&G’s presence in the US PRT market.
- Meiji Yasuda will continue outsourcing investment management of US PRT and protection assets to L&G, and both companies will co-invest in global private assets over the coming years.
Use of Proceeds & Shareholder Returns
L&G expects to receive around $2.3 billion (£1.8 billion) in proceeds at completion, with approximately £400 million allocated to fund the US PRT reinsurance arrangement. The company intends to return £1 billion to shareholders via dividends and share buybacks, representing over 40% of its market cap between 2025-2027. The remaining funds will be reinvested in line with L&G’s strategic growth initiatives.
Following completion, the transaction will boost L&G’s Solvency II ratio by approximately 22%, with a net increase of around 7% after the proposed buyback.
Strategic Rationale & Growth Ambitions
The sale aligns with L&G’s broader strategic direction, first outlined at the Capital Markets Event (CME) in June 2024. Since then, the company has advanced its transformation, including senior leadership changes, the sale of Cala, and a strategic investment in Taurus Investment Holdings.
This transaction further solidifies L&G’s focus on its three core business areas—Asset Management, Institutional Retirement, and UK Retail—while enabling international expansion.
L&G reaffirmed its 2024 financial guidance, projecting mid-single-digit growth in core operating profit and maintaining its targets for the next three years:
- 6-9% compound annual growth rate (CAGR) in core operating earnings per share (EPS) from 2024-2027.
- Over 20% operating return on equity for 2025-2027.
- £5-6 billion cumulative Solvency II capital generation over 2025-2027.
L&G will include the anticipated £1.2 billion capital gain from the transaction in its Solvency II capital generation targets. An updated outlook for the UK Retail division, reflecting the sale of the US protection business, will be provided in H2 2025 during an investor event.
