Staff members of Anbang Insurance Group Co. Ltd. explain their policies to prospective clients at an international finance expo in Beijing. (Photo : www.chinadailyasia.com)
Anbang Insurance Group Co. is set to buy Fidelity & Guaranty Life Co., a U.S.-based life insurer, for about $1.57 billion as part of its overseas expansion scheme, the China Daily reported.
According to the Beijing-based firm, it will pay $26.80 for every Fidelity share and the acquisition until completion, which will make Anbang one of the largest insurers by market share in fixed annuity products in the U.S.
One of Fidelity & Guaranty Life's major stockholders is HRG Group Inc., a financial holding company.
Anbang said in a statement that the transaction is expected to bring value to clients of both Anbang and FGL. The company added that the acquisition is consistent with Anbang's investment strategy to globalize.
The report said that the deal is now pending regulatory approval. It is expected to close in the second quarter of 2016.
Chris Littlefield, president and CEO of Fidelity & Guaranty Life, said that the deal would lead the company on a "good path for continued success."
"Our expertise . . . coupled with Anbang's resources, will allow us to continue to grow our business and serve our customers," Littlefield said.
Maurice Greenberg, CEO of CV Starr & Co. Inc. and former CEO of insurance giant AIG Inc., said that the acquisition will boost Anbang's presence in the U.S.
Robert Hartwig, president and economist of the Insurance Information Institute, noted that the insurance business is becoming more global and a large number of cross-border deals are happening in life insurance and reinsurance.
"This is part of a larger trend that we're seeing around the world, particularly with respect to Asian investors, we're seeing investments and insurers as part of a larger effort to diversify portfolios among the Chinese investors. Many of the investment entities in China that are purchasing insurers are also purchasing such things like real estate," Hartwig said.
The report added that Chinese companies are increasing their presence in U.S. insurance. In May, the remaining 80 percent of Ironshore Inc. shares were bought by Fosun International Ltd.
In the U.S., Anbang gained prominence for its purchase of the Waldorf Astoria New York hotel for $2 billion, although the firm has been acquiring more insurance firms in Europe.
Earlier this year, Anbang entered the Dutch insurance market by acquiring VIVAT Verzekeringen, following its purchase of Belgium's Fidea Assurances last year.
