Voya Financial Inc. has announced that it will be selling its closed block variable annuity and fixed indexed annuities businesses, with an eye toward making a $1 billion stock buyback by June 30 of 2018.
According to a Nasdaq report, Voya will divest substantially all of its CBVA segment, as well as its individual fixed and fixed indexed annuity business, through an agreement with a consortium of investors led by affiliates of Apollo Global Management, LLC, Crestview Partners and Reverence Capital Partners.
The report says that the deal will allow Voya to focus on its higher-growth, higher-return, capital-light retirement, investment management and employee benefits businesses.
Voya said it will divest Voya Insurance and Annuity Company, the insurance subsidiary that has primarily issued Voya’s variable, fixed and fixed indexed annuities.
VIAC will be acquired by Venerable Holdings, Inc., a newly formed investment vehicle owned by the consortium.
In addition, Athene Holding, Ltd. and Voya also will participate in this consortium, with Voya having a 9.9 percent equity stake in Venerable.
Based on the terms of the agreement, Voya estimates that the transaction will result in about $1.1 billion of value, including a $400 million ceding commission paid by Athene for Voya’s fixed and fixed indexed annuities business.
Voya expects more than $500 million in immediately deployable capital, which is subject to change until closing, and intends to use the deployable capital for additional share repurchases beyond its $1 billion existing authorization.
In the report, Rodney O. Martin, Jr., chairman and chief executive officer, Voya Financial, is quoted saying, “.. we expect to increase Voya’s quarterly operating earnings per share to between $1.10 and $1.20 within 12 months of the transaction closing. ... We also will continue with our share-repurchase plans, including our intent to repurchase $1 billion of our common stock by June 30, 2018.”
The transaction is expected to close in Q2 or Q3 2018, subject to customary closing conditions, including regulatory approvals.
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