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Fidelity National Financial Inc said on Friday it would acquire U.S. annuities and life insurance firm FGL Holdings Inc. in a deal valued at $2.7 billion, as it seeks to expand beyond its core title insurance business.
Reuters reported on Thursday that Fidelity was close to acquiring FGL.
Under the terms of the cash-and-stock deal, the holders of FGL’s shares may elect to receive either $12.50 per share in cash or 0.2558 of a share of the FNF stock for each share of FGL they own, representing a premium of about 3% to FGL’s Thursday close.
Fidelity had a 7.6% stake in FGL as of the end of September.
The deal is expected to increase Fidelity’s earnings per share by 10% in 2020 and by 20% in 2021.
Des Moines, Iowa-based FGL generated $1.55 billion in revenue in the first nine months of 2019, up 68% year on year.
FGL was acquired in 2017 in a $1.84 billion deal by an investor group led by a so-called special purpose acquisition company founded by veteran dealmaker Chinh Chu, as well as funds affiliated with private equity firm Blackstone Group Inc and Fidelity National Financial.
Blackstone is expected to keep a stake in the combined company, Reuters reported on Thursday, citing sources.
Based in Jacksonville, Florida, Fidelity provides title insurance and transaction services to the real estate and mortgage industries.
(Reporting by Bharath Manjesh in Bengaluru; Editing by Maju Samuel)