The Carlyle Group and T&D Holdings have acquired a 76.6 percent stake in Fortitude Group Holdings from American International Group. The purchase price is $1.8 billion. Fortitude Group Holdings’s group companies include Fortitude Re, a provider of retroactive reinsurance and legacy run-off management products.
NEW YORK & TOKYO –The Carlyle Group (NASDAQ: CG) and T&D Holdings (TYO: 8795) announced today that they have completed their acquisition of a 76.6% interest in Fortitude Group Holdings, whose group companies include Fortitude Re, from American International Group, Inc. (NYSE: AIG). The transaction, which was first announced in November 2019, closed following receipt of required regulatory approvals and customary closing conditions. At closing, AIG received approximately $2.2 billion in sale proceeds, including the purchase price of $1.8 billion along with additional consideration paid in accordance with the terms of the purchase agreement.
Fortitude Re is the reinsurer of approximately $30 billion of reserves from AIG’s Legacy Life and Retirement Run-Off Lines and approximately $4 billion of reserves from AIG’s Legacy General Insurance Run-Off Lines related to business written by multiple wholly-owned AIG subsidiaries.
Brian Duperreault, AIG’s Chief Executive Officer, said, “Closing this transaction marks the completion of a significant milestone in AIG’s strategy to efficiently manage our legacy liabilities while strengthening our balance sheet and upholding our commitments to regulators and policyholders. Fortitude Re will continue to be an important partner for AIG, and I would like to thank colleagues across AIG and everyone who has worked diligently towards today’s announcement.”
Kewsong Lee, Carlyle’s Co-Chief Executive Officer, said, “Our partnership with Fortitude Re represents an important strategic investment that is focused on growing the platform to bring innovative solutions to the insurance industry. Fortitude Re has performed remarkably well in the current environment thanks to its robust risk management, and we believe it is well-positioned to deliver sustainable growth and profitability. We thank AIG and T&D for their continued partnership and look forward to working together to drive value for all of Fortitude Re’s stakeholders.”
Hirohisa Uehara, T&D’s Representative Director and President, said, “Despite increasing uncertainty due to the COVID-19 outbreak around the globe, the successful completion of this transaction is significantly meaningful for T&D and a strategically important step towards continued growth of Fortitude Re and our future business collaboration. T&D will focus on supporting Fortitude Re by contributing our expertise in life insurance business in Japan to create synergies with our domestic life insurance business as well as to diversify our business portfolio. We look forward to working together with Fortitude Re, AIG and Carlyle in the closed block business.”
Ownership interest in Fortitude Re post-closing remains as outlined in the transaction announcement: Carlyle and a newly created Carlyle-managed fund hold 71.5 percent, which includes the 19.9 percent stake acquired by Carlyle in November 2018, T&D holds 25 percent and AIG holds 3.5 percent.
Additional information about Fortitude Re is available on its website at https://www.fortitude-re.com/.
Additional information from AIG regarding the closing of the transaction will be available in the Investors section of AIG’s website, https://www.aig.com.
Additional information about T&D’s minority investment will be available in disclosures T&D will file today with the Tokyo Stock Exchange, which will also be posted on the “News Releases” page of its website: https://www.td-holdings.co.jp/en/news/.
American International Group, Inc. (AIG) is a leading global insurance organization. AIG member companies provide a wide range of property casualty insurance, life insurance, retirement solutions, and other financial services to customers in more than 80 countries and jurisdictions. These diverse offerings include products and services that help businesses and individuals protect their assets, manage risks and provide for retirement security. AIG common stock is listed on the New York Stock Exchange. Additional information about AIG can be found at www.aig.com. References to additional information about AIG have been provided as a convenience, and the information contained on such website is not incorporated by reference into this press release.
About The Carlyle Group
The Carlyle Group (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across four business segments: Corporate Private Equity, Real Assets, Global Credit and Investment Solutions. With $217 billion of assets under management as of March 31, 2020, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies and the communities in which we live and invest. The Carlyle Group employs more than 1,775 people in 32 offices across six continents. Further information is available at www.carlyle.com. Follow The Carlyle Group on Twitter @OneCarlyle.
About T&D Holdings
T&D Holdings, Inc. (T&D) is a publicly listed insurance holdings company of T&D Insurance Group, which is comprised of three core life insurers, Taiyo Life Insurance Company, Daido Life Insurance Company, and T&D Financial Life Insurance Company. Its headquarters is located in Tokyo, Japan. As of March 31, 2020, total assets of T&D were JPY 16,520 billion. Daido Life has had a long-term business partnership with AIG in Japan since 1971. In June 2019, T&D established a wholly owned investment subsidiary, T&D United Capital Co., Ltd. which is the entity that has acquired a 25 percent ownership interest in Fortitude Group Holdings directly, with an aim of accelerating the strategic initiatives of T&D.