In a continuing effort to "reduce its exposure to spread-based business," Allstate has entered into a definitive agreement to sell its Lincoln Benefit Life (LBL) business to Resolution Life, a subsidiary of U.K.-based The Resolution Group, for $600 million, Allstate announced.
The deal will further Allstate's objective of exiting the independent agency segment of the market, and is also in line with plans to discontinue issuing fixed annuity (spread-based) business by year-end 2013, according to the company.
The sale of LBL, according to chairman, president, and CEO Thomas Wilson, will "sharpen Allstate Financial's focus on the Allstate agency channel while still providing a broad suite of products for our customers."
Including tax benefits, Allstate expects to generate cash proceeds of an estimated $785 million from the transaction. The sale of LBL will also lower Allstate's required capital requirements by about $1 billion, the company said. A GAAP loss on sale of an estimated $475 million to $525 million, and a decline in GAAP equity between $575 million and $675 million, are expected.
The transaction will likely close by year end, and is subject to customary closing conditions.
The article Allstate Sells Lincoln Benefit Life Unit originally appeared on Fool.com.
Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.