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Protective Life arm signs agreement with MONY

Assuming a closing date of October 1, 2013, the purchase price paid to AXA is estimated to be approximately $1.06 billion, including statutory capital and surplus of approximately $303 million.

April 11, 2013 12:11 IST | India Infoline News Service

Protective Life Corporation announced that its principal subsidiary, Protective Life Insurance Company, has signed an agreement with certain subsidiaries of AXA SA to acquire MONY Life Insurance Company and reinsure certain policies of MONY Life Insurance Company of America.

Assuming a closing date of October 1, 2013, the purchase price paid to AXA is estimated to be approximately $1.06 billion, including statutory capital and surplus of approximately $303 million. The total capital investment by Protective is estimated to be approximately $1.09 billion. The transaction will be subject to customary post-closing adjustments. Assuming an October 1, 2013 close, the transaction is expected to contribute $0.10 to $0.15 to Protective’s fully diluted earnings per share in 2013, $0.55 to $0.65 per fully diluted share in 2014, and $0.65 to $0.75 per fully diluted share in 2015, net of integration and transition costs.

“This large, high quality, seasoned book of business presents one of the most attractive acquisition opportunities we have seen in many years,” said John D. Johns, Protective’s Chairman, President and Chief Executive Officer. “This book of business, comprised primarily of life insurance policies written prior to 2004, has a limited array of product and equity market guarantees and should produce a steady and predictable stream of earnings for many years to come. Our ability to move forward on such an important transaction again demonstrates our company’s ability to leverage our industry-leading acquisition capabilities to create value for our shareholders.”

The transaction is expected to close in the second half of 2013 and is subject to receipt of various regulatory approvals and other customary conditions to closing. Prior to the closing, AXA will cause MONY to transfer its subsidiaries, MLOA, U.S. Financial Life Insurance Company, MONY International Holdings, LLC and MONY Financial Services, Inc., none of which are being sold to Protective as part of the acquisition, to another subsidiary of AXA. Protective plans to service the acquired business through the existing workforce and administrative platform in Syracuse, NY that is currently being used by AXA to service the business. The benefits provided for in the acquired policies will not be impacted by the transaction.

Willkie Farr & Gallagher LLP and Barclays PLC served as advisors to Protective during the transaction and PricewaterhouseCoopers LLP provided tax advisory services.

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