Truist in Talks to Sell Insurance Business for $10 Billion: Report

October 10, 2023

Truist Financial is in talks to sell its insurance brokerage unit to private equity firm Stone Point for about $10 billion, news website Semafor reported on Monday, citing people familiar with the matter.

The potential deal would be the latest example of lingering effects following the banking crisis earlier this year, which continues to redraw the industry landscape even months after the last bank failure.

A sweeping overhaul of capital rules proposed by U.S. regulators in the aftermath of the crisis is prompting banks to prioritize their core businesses, spurring a retreat from secondary ventures.

Truist’s shares climbed 7.3% to $29.42 on Oct. 10, set for their biggest intraday percentage gain since early May if current levels hold.

Stone Point bought a 20% stake in the unit, known as Truist Insurance Holdings, in April in a deal that valued the business at $14.75 billion.

Related: Stone Point to Acquire Stake in Truist Insurance for Nearly $2B

When the transaction was unveiled in February, before the industry turmoil, Truist said it would continue to own 80% of the unit.

The talks with Stone Point are ongoing, according to the Semafor report, which added that a deal may hinge on Stone Point’s ability to scrounge up enough debt.

While the market for mergers and acquisitions is slowly reviving, buyout loans continue to be a concern as lenders wait for stronger signs of a rebound in dealmaking before financing corporate purchases.

Truist Financial declined to comment on the Semafor report, while Truist Insurance and Stone Point did not immediately respond to Reuters requests for comment.

Editors Notes: Truist Insurance Holdings is the sixth-largest insurance broker in the U.S. Truist Insurance Holdings operates more than 250 offices through its wholesale, retail, and insurance services divisions. Its insurance units include McGriff Insurance Services; CRC Insurance Services; Crump Life Insurance Services; AmRisc; and premium finance companies AFCO Credit, Prime Rate Premium Finance and CAFO.

In April, AIG said it has finalized an agreement with Stone Point Capital to form Private Client Select (PCS) Insurance Services, an independent managing general agent serving the high net worth and ultra high net worth market.

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