HONG KONG (BLOOMBERG) – Chubb will buy Cigna Corp’s life, accident and supplemental businesses in seven places for US$5.75 billion (S$7.8 billion) in a deal aimed at boosting its operations in the Asia Pacific region.
The transaction, which involves Cigna’s businesses in Hong Kong, Indonesia, Korea, New Zealand, Taiwan and Thailand as well as its interest in a joint venture in Turkey, comes months after Chubb was repeatedly rebuffed in its bid to take over Hartford Financial Services Group for about US$25 billion.
The addition of Cigna’s business will “rebalance our global portfolio toward this important region,” said Evan G. Greenberg, Chubb’s chairman and chief executive officer in a statement late on Thursday (Oct 7).
For Cigna, the move is in line with efforts to get out of other businesses to focus on healthcare. The company expects to realise approximately US$5.4 billion of net after-tax proceeds from the transaction and plans to utilise the proceeds primarily for share repurchase, it said, with impact likely to be “neutral to slightly dilutive” to earnings per share in 2022.
In 2019, Cigna agreed to sell its life and disability insurance business in the US to New York Life Insurance for US$6.3 billion.
The company said it will continue to operate its health insurance businesses outside the US, in markets like the Middle East, Europe, Hong Kong, Singapore and joint ventures in Australia, China and India.
The operations Cigna is selling are part of its international business, which generated about US$6 billion in sales last year, or less than 4 per cent of the company’s total annual revenue, according to data compiled by Bloomberg.
The transaction is expected to be completed in 2022, subject to regulatory approvals.