MetLife, Inc. MET has entered into a definitive agreement with Fortress Investment Group LLC FIG to acquire its traditional fixed income asset management business — Logan Circle Partners, L.P. The acquisition is expected to close in the third quarter.
The deal valuing $250 million will be funded in cash. Per management, the shelled out cash will not deter it from carrying on with its $3 billion share buyback program, which is expected to be completed by the end of this year.
The transaction is in line with MetLife's efforts to grow in business areas that require low capital but provide strong risk-adjusted internal rates of returns and sustainable cash flows. In the same vein, the company is also undergoing the spin-off of its retail life unit named Brighthouse Financial. This business has locked significant capital and carries equity and interest rate risks.
Business restructuring efforts have been taken positively by investors as evident by share price appreciation of 41% compared with the gain of 39% by the Zacks categorized Insurance - Multi line industry.
FBL Financial beat estimates in two of the last four quarters, with an average positive surprise of 1.98%.
Cigna beat estimates in three of the last four quarters, with an average positive surprise of 1.35%.
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Fortress Investment Group LLC FIG: Free Stock Analysis Report
MetLife, Inc. MET: Free Stock Analysis Report
Cigna Corporation CI: Free Stock Analysis Report
FBL Financial Group, Inc. FFG: Free Stock Analysis Report
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