November 9, 2015 / 1:18 PM / 3 years ago

China's Anbang Insurance to buy U.S. insurer Fidelity & Guaranty

(Reuters) - Anbang Insurance Group agreed to buy U.S. annuities and life insurer Fidelity & Guaranty Life FGL.N for about $1.57 billion as Chinese insurers seek to expand into the United States.

Privately held Anbang said on Monday it would pay $26.80 per share, a premium of 3 percent to the stock’s Friday close.

Fidelity & Guaranty’s stock was down 1 percent at $25.98 in early trading.

Financial holding company HRG Group Inc HRG.N, Fidelity & Guaranty Life’s majority stockholder, has approved the deal, which would make Anbang one of the largest insurers by market share in fixed-indexed annuity products in the United States.

HRG’s shares were up slightly at $13.11.

The deal is expected to close in the second quarter of 2016.

“The deal is too small for anti-trust issues, but there could be regulatory hurdles as the deal will have to be cleared by a number of state regulators in the U.S.,” Sandler O’Neill analyst Paul Newsome told Reuters.

“There has been a broad trend of consolidation within the insurance space. It could accelerate this year,” he added.

Anbang and other Chinese insurers including Fosun International Ltd (0656.HK) have launched some $6.1 billion of overseas deals this year as they seek to diversify.

Beijing-based Anbang acquired New York’s famed Waldorf Astoria Hotel earlier this year from Hilton Worldwide Holdings Inc (HLT.N) for $1.95 billion.

In July, White Mountains Insurance (WTM.N) agreed to sell its property and casualty reinsurer Sirius International Insurance Group Ltd to a unit of China Minsheng Investment Corp Ltd for about $2.24 billion.

Fosun completed in May the acquisition of the remaining 80 percent interest that it did not already own in Ironshore Inc for $1.84 billion.

Jefferies & Co and Credit Suisse were financial advisers to Fidelity & Guaranty, while Skadden, Arps, Slate, Meagher & Flom LLP was legal adviser.

Anbang was advised by Evercore ISI and Debevoise & Plimpton, while Simpson Thacher & Bartlett LLP was legal adviser.

Reporting by Rachel Chitra in Bengaluru; additional reporting by Richa Naidu; Editing by Maju Samuel and Ted Kerr

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