OREANDA-NEWS. January 13, 2016.
MetLife, Inc. (NYSE:MET) (“MetLife” or “the Company”) today announced a
plan to pursue the separation of a substantial portion of its U.S.
Retail segment.
MetLife is currently evaluating structural alternatives
for such a separation, including a public offering of shares in an
independent, publicly traded company, a spin-off, or a sale. The Company
is also undertaking preparations to complete the required financial
statements and disclosures that would be required for a public offering
or spin-off. The completion of a transaction taking the U.S. Retail
segment public would depend on, among other things, the
U.S. Securities
and Exchange Commission (
SEC) filing and review process as well as
market conditions.
All of the Company’s other reporting segments – Group, Voluntary and
Worksite Benefits (GVWB), Corporate Benefit Funding (CBF), Asia, Latin
America, and Europe, the Middle East and Africa (EMEA) – would remain
part of MetLife. In the U.S. market, MetLife will remain the leader in
employee benefits through its GVWB business and a major provider of
pension and retirement products through its CBF business.
MetLife plans to include the following entities in the new company:
MetLife Insurance Company USA, General American Life Insurance Company,
Metropolitan Tower Life Insurance Company and several subsidiaries that
have reinsured risks underwritten by MetLife Insurance Company USA.
The new company would represent, as of September 30, 2015, approximately
20% of the operating earnings of MetLife and 50% of the operating
earnings of MetLife’s U.S. Retail segment. The new company would have
approximately \\$240 billion of total assets, including \\$45 billion
currently reported in the Corporate Benefit Funding and Corporate and
Other segments. Approximately 60% of current U.S. variable annuity
account values, including 75% of variable annuities with living benefit
guarantees, are in entities that would be a part of the new company. The
new company would also contain approximately 85% of the U.S. universal
life with secondary guarantee business.
The parts of the U.S. Retail segment that would stay with MetLife are:
the life insurance closed block, property-casualty, and the life and
annuity business sold through Metropolitan Life Insurance Company
(MLIC). MLIC would no longer write new retail life and annuity business
post-separation.
The new business is to be led by MetLife Executive Vice President
Eric
Steigerwalt. The complete management team of the new company, as well as
its board of directors, is to be defined over time as preparations for
the transaction take shape.
Steven A. Kandarian, MetLife chairman, president and CEO, said, “At
MetLife our goal is to create long-term value for our shareholders and
deliver exceptional customer experiences. As a result of our Accelerating
Value strategic initiative, MetLife has been evaluating
opportunities to increase sustainable cash generation and is directing
capital to businesses where we can achieve a clear competitive advantage
and deliver a differentiated value proposition for customers. This
analysis considers the regulatory and economic environment in each
market where we do business. We have concluded that an independent new
company would be able to compete more effectively and generate stronger
returns for shareholders. Currently, U.S. Retail is part of a
Systemically Important Financial Institution (SIFI) and risks higher
capital requirements that could put it at a significant competitive
disadvantage. Even though we are appealing our SIFI designation in court
and do not believe any part of MetLife is systemic, this risk of
increased capital requirements contributed to our decision to pursue the
separation of the business. An independent company would benefit from
greater focus, more flexibility in products and operations, and a
reduced capital and compliance burden.
“This separation would also bring significant benefits to MetLife as we
continue to execute our strategy to focus on businesses that have lower
capital requirements and greater cash generation potential. In the U.S.,
it would allow us to focus even more intently on our group business,
where we have long been the market leader. Globally, we will continue to
do business in a mix of mature and emerging markets to drive growth and
generate attractive returns.”
Kandarian concluded, “It is important to note that this is just the
first step in the process. We will provide more information as the
transaction unfolds, consistent with U.S. securities laws.”
Any separation transaction that might occur will be subject to the
satisfaction of various conditions and approvals, including approval of
any transaction by the MetLife Board of Directors, satisfaction of any
applicable requirements of the SEC, and receipt of insurance and other
regulatory approvals and other anticipated conditions. No shareholder
approval is expected to be necessary. Because the form of a separation
has not yet been set, the Company cannot currently provide a specific
potential completion date. If the separation takes the form of a public
offering, the Company expects that it would file a registration
statement with the SEC in approximately six months. No assurance can be
given regarding the form that a separation transaction may take or the
specific terms thereof, or that a separation will in fact occur.
This news release is not an offer to sell, or a solicitation of an offer
to buy, any securities.
About MetLife
MetLife, Inc. (NYSE:MET), through its subsidiaries and affiliates
(“MetLife”), is one of the largest life insurance companies in the
world. Founded in 1868, MetLife is a global provider of life insurance,
annuities, employee benefits and asset management. Serving approximately
100 million customers, MetLife has operations in nearly 50 countries and
holds leading market positions in the United States, Japan, Latin
America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.
Forward-Looking Statements
This news release may contain or incorporate by reference information
that includes or is based upon forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements give expectations or forecasts of future
events. These statements can be identified by the fact that they do not
relate strictly to historical or current facts. They use words such as
“anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“believe” and other words and terms of similar meaning, or are tied to
future periods, in connection with a discussion of future operating or
financial performance. In particular, these include statements relating
to future actions, prospective services or products, future performance
or results of current and anticipated services or products, sales
efforts, expenses, the outcome of contingencies such as legal
proceedings, trends in operations and financial results.
Any or all forward-looking statements may turn out to be wrong. They can
be affected by inaccurate assumptions or by known or unknown risks and
uncertainties. Many such factors will be important in determining the
actual future results of MetLife, Inc., its subsidiaries and affiliates.
These statements are based on current expectations and the current
economic environment. They involve a number of risks and uncertainties
that are difficult to predict. These statements are not guarantees of
future performance. Actual results could differ materially from those
expressed or implied in the forward-looking statements. Risks,
uncertainties, and other factors that might cause such differences
include the risks, uncertainties and other factors identified herein
(including that no assurance can be given regarding the form that a
separation transaction may take or the specific terms thereof or that a
separation will in fact occur) and in MetLife, Inc.'s most recent Annual
Report on Form 10-K (the "Annual Report") filed with the U.S. Securities
and Exchange Commission (the "SEC"), Quarterly Reports on Form 10-Q
filed by MetLife, Inc. with the SEC after the date of the Annual Report
under the captions "Note Regarding Forward-Looking Statements" and "Risk
Factors," and other filings MetLife, Inc. makes with the SEC. MetLife,
Inc. does not undertake any obligation to publicly correct or update any
forward-looking statement if MetLife, Inc. later becomes aware that such
statement is not likely to be achieved. Please consult any further
disclosures MetLife, Inc. makes on related subjects in reports to the
SEC.
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