Symetra to be acquired by Japanese insurer for $3.8 billion
The Sumitomo Life Insurance Company of Japan said Tuesday it has agreed to acquire Symetra Financial Corp., an American provider of insurance and financial products, for about $3.8 billion, The New York Times reported.
The deal is the latest by a Japanese insurer seeking to expand its operations into the United States, the world’s largest insurance market, as an aging Japanese population is expected to cut into results.
Symetra, which last year opened an office in West Des Moines, also changed its state of legal domicile to Iowa, although its headquarters remains in Bellevue, Wash. The Iowa Insurance Division must approve the transaction.
Symetra would give Sumitomo Life its first real foothold in the United States.
Under the terms of the deal, Symetra shareholders will receive $32 a share in cash, and a special dividend of 50 cents a share. The deal represents a 32 percent premium to the company’s average share price over the 30 days that ended Aug. 5.
“We are enthusiastic about the opportunity to acquire Symetra’s dynamic business and believe that a transaction will be mutually beneficial and will create significant value for both Symetra and Sumitomo Life,” Masahiro Hashimoto, the president and CEO of Sumitomo Life, said in a news release.
Hashimoto added that the acquisition would lift and diversify the company’s operations overseas and would “enhance our financial and earnings foundation.”
Symetra, which sells annuities, life insurance and employee benefits, posted revenue of $2.18 billion in 2014 and has about 1,400 employees.
Symetra’s largest shareholders, White Mountains Insurance Group and Berkshire Hathaway, have agreed to vote in favor of the transaction. They collectively own about 35 percent of the company’s shares.
“This transaction will bring compelling strategic and financial benefits for Symetra, including providing a substantial cash premium to our shareholders,” Thomas Marra, president and chief executive of Symetra, said in a news release.
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