The deal will whole the insurer’s exit from the life insurance enterprise.
Total consideration to The Hartford is $2.05 billion, constructed from coins from the investor group, a pre-last cash dividend, debt covered as part of the sale, and a nine.7 percent ownership interest within the obtaining organisation. The overall consideration quantity does not include $1.Four billion in dividends previously paid via Talcott Resolution in 2017.
The sale is predicted to close in the first half of 2018.
The sale does not encompass the company’s group blessings or mutual finds subsidiaries, with a view to be transferred to some other Hartford subsidiary. In addition, right now after final, Talcott Resolution will reinsure a portion of its constant annuity, payout annuity and established agreement businesses to a subsidiary of Global Atlantic Financial Group.
Following the sale, Hartford Investment Management Co. (HIMCO), The Hartford’s investment management group, will continue to manipulate a considerable majority of Talcott Resolution’s funding belongings for an preliminary five-yr term. HIMCO also can be retained through Global Atlantic to manage positive property related to the publish-ultimate reinsurance agreement.
As part of the transaction, approximately four hundred Hartford employees turns into employees of the brand new business enterprise and might be placed at workplaces presently owned or leased by The Hartford in Windsor, Connecticut, and Woodbury, Minnesota.
The Hartford’s Chairman and CEO Christopher Swift said the transaction will toughen the insurer’s recognition on developing its property/casualty, group advantages and mutual funds organizations. “We also count on the sale will improve our destiny ROE and earnings increase profile and enhance the enterprise’s monetary flexibility,” Swift stated.
Based on the phrases of the sale and the retention of the tax attributes, The Hartford estimates that the sale will result in a GAAP net loss of approximately $3.2 billion, after tax, which might be recorded in discontinued operations in fourth quarter 2017.1
Beginning in fourth quarter 2017 and persevering with till last of the transaction, the effects of operations of Talcott Resolution will be said as discontinued operations for all durations supplied in The Hartford’s monetary statements.
The Hartford’s Chief Financial Officer Beth Bombara said the transaction “presents an incredible final results for shareholders,” even though it consequences in a GAAP loss. “It speeds up the return of capital from Talcott Resolution as compared with the sluggish run-off of the business.”
She said the insurer is “evaluating opportunities” to installation proceeds from the sale and currently anticipate to apply about $400 million for additional debt reimbursement.