Summary
MetLife, Inc. (MET) has filed an 8-K report detailing a significant definitive agreement to acquire the Transferred Businesses from ALICO Holdings LLC and American International Group, Inc. (AIG). This strategic acquisition, expected to close in late 2010, involves the purchase of American Life Insurance Company (ALICO) and Delaware American Life Insurance Company, along with associated international operations. The total consideration is substantial, comprising $6.8 billion in cash and a mix of MetLife's common stock, Series B Contingent Convertible Junior Participating Non-Cumulative Perpetual Preferred Stock, and $3.0 billion in equity units. This transaction represents a major expansion for MetLife into new markets and a substantial integration effort. The filing also outlines the financing structure for the acquisition, including a commitment for a $5.0 billion senior credit facility to cover any shortfall in the cash portion of the purchase price not covered by MetLife's own securities offerings. Various agreements are in place to manage the transition, including an Investor Rights Agreement, a Special Asset Protection Agreement to mitigate certain asset risks, and a Transition Services Agreement. Investors should note the potential dilution from the significant issuance of new MetLife common stock and preferred stock, as well as the long-term strategic implications of integrating these acquired businesses.
Key Highlights
- 1MetLife, Inc. entered into a Stock Purchase Agreement to acquire ALICO and Delaware American Life Insurance Company from ALICO Holdings LLC and AIG for $6.8 billion in cash and significant equity issuance.
- 2The transaction includes the acquisition of ALICO, Delaware American Life Insurance Company, and associated international life insurance businesses.
- 3The total consideration involves $6.8 billion in cash, 78,239,712 shares of MetLife common stock, 6,857,000 shares of Series B Convertible Preferred Stock, and $3.0 billion in equity units.
- 4The company has secured a commitment for a $5.0 billion senior credit facility to finance a portion of the cash consideration.
- 5An Investor Rights Agreement will govern the sale and voting of securities issued to the seller, including registration rights and transfer restrictions.
- 6A Special Asset Protection Agreement is in place to share certain asset-related losses between MetLife and the seller.
- 7The acquisition is subject to various governmental and regulatory approvals, with an expected closing in late 2010.