Legal & General Group PLC (LSE:LGEN) has struck a deal to sell its US protection business to Japan’s Meiji Yasuda for £1.8bn.
The agreement also includes a long-term partnership aimed at expanding L&G’s US Pension Risk Transfer (PRT) business, with Meiji Yasuda taking a 20% stake.
As part of the deal, Meiji Yasuda is planning to acquire around 5% of L&G’s shares, deepening ties between the two firms.
The partnership extends into asset management, with Meiji Yasuda outsourcing investment management of its US PRT and protection assets to L&G. Both companies will also co-invest in private assets over the coming years.
The UK life and pensions group expects to complete the sale by the end of 2025, pending regulatory approvals. Once finalised, L&G will retain an 80% interest in the US PRT business through reinsurance agreements.
The proceeds from the sale will be put to work in a variety of ways. Around £400m will fund the PRT reinsurance arrangement, while L&G plans to return £1bn to shareholders through dividends and share buybacks.
In total, it expects to distribute about 40% of its market value over the next three years.
L&G says the deal aligns with its long-term strategy, which includes sharpening its focus on core businesses and increasing shareholder returns.
Chief executive António Simões called it a "transformative transaction" that will allow L&G to scale up its US PRT business while expanding its global asset management operations.