ANBANG Insurance Group has agreed to buy US annuities and life insurer Fidelity & Guaranty Life for about US$1.57 billion as Chinese insurers seek to expand into the United States.
Privately held Anbang said yesterday that it would pay US$26.80 per share, a premium of 3 percent to the stock’s Friday close.
Financial holding company HRG Group Inc, Fidelity & Guaranty Life’s majority stockholder, has approved the deal, which would make Anbang one of the largest insurers by market share in fixed-indexed annuity products in the US.
The deal is expected to conclude in the second quarter of 2016.
“The deal is too small for anti-trust issues, but there could be regulatory hurdles as the deal will have to be cleared by a number of state regulators in the US,” Sandler O’Neill analyst Paul Newsome said.
“There has been a broad trend of consolidation within the insurance space. It could accelerate this year,” he added.
Anbang and other Chinese insurers including Fosun International Ltd have launched some US$6.1 billion of overseas deals this year as they seek to diversify.
Fosun completed in May the acquisition of the remaining 80 percent interest that it did not already own in Ironshore Inc for US$1.84 billion.