Attached files
file | filename |
---|---|
8-K - FORM 8-K - METLIFE INC | y83074e8vk.htm |
EX-99.2 - EX-99.2 - METLIFE INC | y83074exv99w2.htm |
Exhibit 99.1
Contacts: |
For Media: | John Calagna | ||
(212) 578-6252 | ||||
For Investors: | Conor Murphy | |||
(212) 578-7788 |
METLIFE TO ACQUIRE AMERICAN LIFE INSURANCE COMPANY FROM
AMERICAN INTERNATIONAL GROUP FOR APPROXIMATELY $15.5 BILLION
AMERICAN INTERNATIONAL GROUP FOR APPROXIMATELY $15.5 BILLION
Combination of highly complementary businesses will create a global life insurance
and employee benefits powerhouse with compelling growth opportunities
and employee benefits powerhouse with compelling growth opportunities
NEW YORK, March 8, 2010 MetLife, Inc. (NYSE: MET) announced today a definitive agreement to
acquire one of American International Group, Inc.s (AIG) international subsidiaries, American Life
Insurance Company (ALICO), for approximately $15.5 billion. The consideration will consist of $6.8
billion in cash and approximately $8.7 billion in MetLife equity securities, subject to closing
adjustments.
Specifically, the equity security portion of the purchase price will consist of 78.2 million shares
of MetLife common stock valued at $3.0 billion, 6.9 million shares of contingent convertible
preferred stock valued at $2.7 billion and 40 million equity units having an aggregate stated value
of $3.0 billion. The values of the common stock and the preferred stock are based upon the closing
price of MetLifes common stock on the New York Stock Exchange on Friday, March 5, 2010.
Finally, MetLife expects the cash portion of the purchase price to be financed through a
combination of the issuances of senior debt and MetLife common stock as well as cash on hand.
The acquisition of ALICO, one of the worlds largest and most diversified international life
insurance companies, accelerates MetLifes global growth strategy. Upon completion of the
transaction, MetLife, which is already the largest life insurer in the United States and Mexico,
will become a leading competitor in Japan, the worlds second-largest life insurance market.
The transaction materially advances MetLifes position in Europe. It also moves MetLife into
a top five market position in many high growth emerging markets in Central and Eastern Europe, the
Middle East and Latin America.
1
With this acquisition, MetLife is delivering on its strategy to accelerate international expansion
as a powerful growth engine for the company, said C. Robert Henrikson, chairman, president and
chief executive officer of MetLife, Inc. Todays transaction will bring together two profitable,
complementary, well-established businesses with superb track records and strong long-term growth
potential. We expect it will increase MetLifes return on equity and be accretive to operating
earnings.
MetLife expects the transaction to increase its 2011 operating earnings per share by approximately
$0.45 to $0.55 per share, and enable the company to increase its estimated 2011 year-end operating
return on equity by 140 to 160 basis points. Operating earnings per share does not include
transition and other one-time expenses estimated at $0.12 per share.
MetLife and AIG will enter into an Investor Rights Agreement which will, among other things,
require AIG to hold specified amounts of MetLife securities for certain designated periods of time.
Certain lock-ups will begin to expire nine months after closing. The ALICO special purpose
vehicle intends to monetize the MetLife securities over time, subject to market conditions,
following the lapse of agreed-upon minimum holding periods.
Henrikson added, This transaction creates a global leader in life insurance and employee benefits
by adding significant scale and geographic reach to MetLifes international footprint and further
diversifying the companys product mix, distribution channels and geographic exposures. We have
tremendous respect for the franchise that the ALICO team has built and, to ensure a successful
integration, I have asked Bill Toppeta, president of MetLifes International business, to lead the
integration of ALICO into MetLife.
MetLife has a proven track record in integrating complex multi-national acquisitions and we look
forward to welcoming our new ALICO colleagues, said William J. Toppeta, president, MetLifes
International business. Moreover, we are committed to ensuring a smooth transition for ALICOs
customers and distributors, who will benefit by joining a financially strong, industry-leading
organization with more than 140 years of experience in providing customers with the products and
services they need to protect their financial future.
Founded in 1921, ALICO is a leading international life insurer that provides consumers and
businesses with products and services for life insurance, accident and health insurance, retirement
and wealth management solutions. The transaction includes all of ALICO, including the companys
approximately 60,000 points of distribution, including agents, brokers and financial institutions;
12,500 employees across more than 50 countries; and 20 million customers worldwide. The
transaction also includes ALICOs Global Benefits Network serving U.S. and foreign multinationals.
The transaction has been approved by the boards of directors of both MetLife and AIG, and is
expected to close by the end of 2010. The transaction is subject to certain regulatory approvals
and other customary closing conditions.
Credit Suisse served as principal financial advisor to MetLife. Barclays Capital served as special
financial advisor to MetLife. BofA Merrill Lynch, Deutsche Bank and HSBC also served as
2
financial
advisors to MetLife. Dewey & LeBoeuf LLP served as principal legal advisor to MetLife.
MetLife Conference Call
MetLife will hold a conference call and Webcast today at 8:00 a.m. (ET) to discuss the companys
acquisition of ALICO. The conference call will be available live via telephone and
the Internet. To listen over the telephone, dial (612) 326-0027 (domestic and international
callers). To listen to the conference call over the Internet and/or to access the presentation
materials for this event, visit www.metlife.com (through a link on the Investor Relations page).
Those who want to listen to the call on the telephone or via the Internet should dial in or go to
the Web site at least fifteen minutes prior to the call to register, and/or download and install
any necessary audio software.
Presentation materials referenced during the conference call will be included in a Current Report
on Form 8-K that will be furnished to the U.S. Securities and Exchange Commission.
The conference call will be available for replay via telephone and the Internet beginning at 10:00
a.m. (ET) on Monday, March 8, 2010, until Monday, March 15, 2010 at 11:59 p.m. (ET). To listen to
a replay of the conference call over the telephone, dial (320) 365-3844 (domestic and international
callers). The access code for the replay is 146290. To access the replay of the conference call
over the Internet, visit the above-mentioned Web site.
Non-GAAP and Other Financial Disclosures
All references above in this press release to net income (loss), net income (loss) per share,
operating earnings, operating earnings per share and operating return on equity should be read as
net income (loss) available to MetLife, Inc.s common shareholders, net income (loss) available to
MetLife, Inc.s common shareholders per diluted common share, operating earnings available to
MetLife, Inc.s common shareholders, operating earnings available to MetLife, Inc.s common
shareholders per diluted common share and operating return on common equity, respectively.
The historical and forward-looking financial information presented in this press release includes
performance measures which are based on methodologies other than generally accepted accounting
principles in the United States of America (GAAP). MetLife, Inc. analyzes its performance using
financial measures, such as operating earnings, operating earnings available to common
shareholders, operating earnings available to common shareholders per diluted common share and
operating return on common equity, that are not based on GAAP. Operating earnings, defined as
operating revenues less operating expenses, net of income tax, is the measure of segment profit or
loss MetLife uses to evaluate segment performance and allocate resources and, consistent with GAAP
accounting guidance for segment reporting, is MetLifes measure of segment performance. Operating
earnings is also a measure by which MetLifes senior managements and many other employees
performance is evaluated for the purposes of determining their compensation under applicable
compensation plans. Operating earnings available to common shareholders, which is used to evaluate
the performance of Banking, Corporate & Other, as well as MetLife, is defined as operating earnings
less preferred stock dividends.
3
Operating revenues is defined as GAAP revenues (i) less net investment gains (losses), (ii) less
amortization of unearned revenue related to net investment gains (losses), (iii) plus scheduled
periodic settlement payments on derivative instruments that are hedges of investments but do not
qualify for hedge accounting treatment, (iv) plus income from discontinued real estate operations,
and (v) plus, for operating joint ventures reported under the equity method of accounting, the
aforementioned adjustments and those identified in the definition of operating expenses, net of
income tax, if applicable to these joint ventures.
Operating expenses is defined as GAAP expenses (i) less changes in experience-rated contractholder
liabilities due to asset value fluctuations, (ii) less costs related to business combinations
(since January 1, 2009) and noncontrolling interests, (iii) less amortization of DAC and VOBA and
changes in the policyholder dividend obligation related to net investment gains (losses), and (iv)
plus scheduled periodic settlement payments on derivative instruments that are hedges of
policyholder account balances but do not qualify for hedge accounting treatment.
MetLife believes the presentation of operating earnings and operating earnings available to common
shareholders as MetLife measures it for management purposes enhances the understanding of its
performance by highlighting the results from operations and the underlying profitability drivers of
the business. Operating earnings, operating earnings available to common shareholders, operating
earnings available to common shareholders per diluted common share and operating return on common
equity should not be viewed as substitutes for GAAP net income (loss) from continuing operations,
net of income tax, GAAP net income (loss) from continuing operations, net of income tax, available
to MetLife, Inc.s common shareholders, GAAP net income (loss) from continuing operations, net of
income tax, available to MetLife, Inc.s common shareholders per diluted common share and return on
common equity, respectively.
In this press release, MetLife provides guidance on its future earnings and earnings per diluted
common share on an operating and non-GAAP basis. A reconciliation of the non-GAAP measures to the
most directly comparable GAAP measures is not accessible on a forward-looking basis because MetLife
believes it is not possible to provide other than a range of net investment gains and losses, which
can fluctuate significantly within or without the range and from period to period and may have a
significant impact on GAAP net income.
About MetLife
MetLife, Inc. is a leading provider of insurance, employee benefits and financial services with
operations throughout the United States and the Latin America, Europe and Asia Pacific regions.
Through its subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million customers
around the world and MetLife is the largest life insurer in the United States (based on life
insurance in-force). The MetLife companies offer life insurance, annuities, auto and home
insurance, retail banking and other financial services to individuals, as well as group insurance
and retirement & savings products and services to corporations and other institutions. For more
information, visit www.metlife.com.
This press release may contain or incorporate by reference information that includes or is
based upon forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events.
These statements can be identified by the fact that they do
4
not relate strictly to historical or current facts. They use words such as anticipate,
estimate, expect, project, intend, plan, believe and other words and terms of similar
meaning in connection with a discussion of future operating or financial performance. In
particular, these include statements relating to future actions, prospective services or products,
future performance or results of current and anticipated services or products, sales efforts,
expenses, the outcome of contingencies such as legal proceedings, trends in operations and
financial results.
Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate
assumptions or by known or unknown risks and uncertainties. Many such factors will be important in
determining MetLifes actual future results. These statements are based on current expectations and
the current economic environment. They involve a number of risks and uncertainties that are
difficult to predict. These statements are not guarantees of future performance. Actual results
could differ materially from those expressed or implied in the forward-looking statements. Risks,
uncertainties, and other factors that might cause such differences include the risks, uncertainties
and other factors identified in MetLife, Inc.s filings with the U.S. Securities and Exchange
Commission (the SEC). These factors include: (i) difficult and adverse conditions in the global
and domestic capital and credit markets; (ii) continued volatility and further deterioration of the
capital and credit markets, which may affect MetLifes ability to seek financing or access its
credit facilities; (iii) uncertainty about the effectiveness of the U.S. governments plan to
stabilize the financial system by injecting capital into financial institutions, purchasing large
amounts of illiquid, mortgage-backed and other securities from financial institutions, or
otherwise; (iv) exposure to financial and capital market risk; (v) changes in general economic
conditions, including the performance of financial markets and interest rates, which may affect
MetLifes ability to raise capital, generate fee income and market-related revenue and finance
statutory reserve requirements and may require MetLife to pledge collateral or make payments
related to declines in value of specified assets; (vi) potential liquidity and other risks
resulting from MetLifes participation in a securities lending program and other transactions;
(vii) investment losses and defaults, and changes to investment valuations; (viii) impairments of
goodwill and realized losses or market value impairments to illiquid assets; (ix) defaults on
MetLifes mortgage loans; (x) the impairment of other financial institutions; (xi) MetLifes
ability to identify any future acquisitions and consummate such acquisitions, including the
acquisition of ALICO, on successful terms, and to successfully integrate acquired businesses with
minimal disruption; (xii) economic, political, currency and other risks relating to MetLifes
international operations; (xiii) MetLife, Inc.s primary reliance, as a holding company, on
dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory
restrictions on the ability of the subsidiaries to pay such dividends; (xiv) downgrades in MetLife,
Inc.s and its affiliates claims paying ability, financial strength or credit ratings; (xv)
ineffectiveness of risk management policies and procedures, including with respect to guaranteed
benefits (which may be affected by fair value adjustments arising from changes in MetLifes own
credit spread) on certain of MetLifes variable annuity products; (xvi) availability and
effectiveness of reinsurance or indemnification arrangements; (xvii) discrepancies between actual
claims experience and assumptions used in setting prices for MetLifes products and establishing
the liabilities for MetLifes obligations for future policy benefits and claims; (xviii)
catastrophe losses; (xix) heightened competition, including with respect to pricing, entry of new
competitors, consolidation of distributors, the development of new products by new and existing
competitors and for personnel; (xx) unanticipated changes in industry trends; (xxi) changes in
accounting standards, practices and/or policies; (xxii) changes in assumptions related to deferred
policy acquisition costs, value of business acquired or goodwill; (xxiii) increased expenses
relating to pension and postretirement benefit plans; (xxiv) deterioration in the experience of the
closed block established in connection with the reorganization of Metropolitan Life Insurance
Company; (xxv) adverse results or other consequences from litigation, arbitration or regulatory
investigations; (xxvi) discrepancies between actual experience and assumptions used in establishing
liabilities related to other contingencies or obligations; (xxvii) regulatory, legislative or tax
changes that may affect the cost of, or demand for, MetLifes products or services; (xxviii) the
effects of business disruption or economic contraction due to terrorism, other hostilities, or
natural catastrophes; (xxix) the effectiveness of MetLifes programs and practices in avoiding
giving its associates incentives to take excessive risks; and (xxx) other risks and uncertainties
described from time to time in MetLife, Inc.s filings with the SEC; and (xxxi) any of the
foregoing factors as they relate to ALICO and its operations.
Neither MetLife, Inc. nor ALICO undertakes any obligation to publicly correct or update any
forward-looking statement if they later become aware that such statement is not likely to be
achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in reports
to the SEC.
# # #
5