Carlyle, T&D Holdings Complete Acquisition of 76% Interest in Fortitude Group From AIG

June 3, 2020

Global investment firm The Carlyle Group and T&D Holdings announced have completed their acquisition of a 76.6% interest in Fortitude Group Holdings, whose group companies include Fortitude Re, from insurer American International Group.

The transaction, which was first announced in November 2019, closed following receipt of required regulatory approvals and customary closing conditions, according to the announcement.

At closing, AIG received approximately $2.2 billion in sale proceeds, including the purchase price of $1.8 billion along with additional consideration paid in accordance with the terms of the purchase agreement.

Fortitude Re is the reinsurer of approximately $30 billion of reserves from AIG’s legacy Life and Retirement run-off lines and approximately $4 billion of reserves from AIG’s legacy General Insurance run-off Llnes related to business written by multiple wholly-owned AIG subsidiaries.

Ownership interest in Fortitude Re post-closing remains as outlined in the transaction announcement: Carlyle and a newly created Carlyle-managed fund hold 71.5 percent, which includes the 19.9 percent stake acquired by Carlyle in November 2018, T&D holds 25 percent and AIG holds 3.5 percent.

Bermuda-based Fortitude Re is a multi-line reinsurance company with expertise in legacy life insurance, annuity and property/casualty insurance lines.

“The sale of Fortitude Re represents an important step for the company and we look forward to the future,” said James Bracken, CEO of Fortitude Re.

Brian Duperreault, AIG chief executive officer, said that closing this transaction is a “significant milestone” in AIG’s strategy to efficiently managing its legacy liabilities while strengthening its balance sheet and upholding commitments to regulators and policyholders.

Kewsong Lee, Carlyle’s co-chief executive officer, said Fortitude Re represents an “important strategic investment that is focused on growing the platform to bring innovative solutions to the insurance industry.”

Hirohisa Uehara, T&D’s representative director and president, said T&D will focus on supporting Fortitude Re by contributing its expertise in life insurance business in Japan to create synergies with its domestic life insurance business and to diversify its business portfolio.

T&D Holdings is a publicly listed insurance holdings company of T&D Insurance Group, which is comprised of three core life insurers, Taiyo Life Insurance Co., Daido Life Insurance Co., and T&D Financial Life Insurance Co. Its headquarters is located in Tokyo, Japan. As of March 31, 2020, total assets of T&D were JPY 16,520 billion. Daido Life has had a long-term business partnership with AIG in Japan since 1971. In June 2019, T&D established an investment subsidiary, T&D United Capital Co., Ltd. which is the entity that has acquired a 25 percent ownership interest in Fortitude Group Holdings directly, with an aim of accelerating the strategic initiatives of T&D.

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