NU Online News Service, July 30, 10:35 a.m. – Swiss Reinsurance Company, Zurich, has agreed to acquire Lincoln National Reassurance Company, Fort Wayne, Ind., from its parent company, Lincoln National Corp., Philadelphia, for $2 billion.
Swiss Re will combine the Lincoln life reinsurance operations with the Swiss Re North American Life & Health unit, Swiss Re says.
Lincoln is selling Lincoln Re to focus on selling life insurance and asset management services, according to Lincoln Chairman Jon Boscia.
“Going forward, Lincoln will use its capital to implement an aggressive, yet disciplined, acquisition strategy and to continue its expanded stock buyback program,” Boscia said in a statement.
The Lincoln board has also authorized a $500 million securities buyback, Boscia said.
Lincoln still has authority to buy back another $866 million in stock, Boscia said.
Lincoln will also keep $500 million of capital now supporting the Lincoln Re business, Swiss Re says.
Swiss Re notes that it will get a tax break when it replaces the capital that the parent company is retaining.
Swiss Re and Lincoln hope to close on the deal in the fourth quarter.
Swiss Re plans to finance the deal by selling stock. The company says it will give details about the stock sale Sept. 7, when it publishes its half-year results.