Connecticut Officials Weigh In On MetLife-Travelers Deal
Connecticut Attorney General Richard Blumenthal says he will appear before the state Department of Insurance to oppose MetLifes planned acquisition of Travelers Life & Annuity.
Blumenthal says he will ask the DOI to kill the deal on the grounds that it would wipe out numerous jobs in Hartford.
“This acquisition is against the public interest because it will destroy jobs, damage our economy and disadvantage families,” Blumenthal says in a statement. “My message to MetLife is simple: Keep jobs in Hartford or keep your hands off Travelers.”
The DOI has not yet scheduled a hearing on the acquisition. A spokeswoman says the department is still awaiting information from MetLife needed to complete its application for state approval of the deal.
Among other details, the DOI asked MetLife for more information about assets included in the deal, a description of how the two companies businesses complement each other and an explanation of why the acquisition is in the public interest.
MetLife, New York, offered in January to acquire Travelers Life from Citigroup Inc., New York, for $11.5 billion.
MetLife announced last week that it plans to offer 1,400 “ongoing positions,” including 1,100 jobs in Hartford, to Travelers Lifes 2,000 employees.
MetLife already has about 1,200 employees of its own in Connecticut.
Connecticut Governor M. Jodi Rell says she was disappointed by the announcement of the job cuts.
“For MetLife, this is a business deal,” Rell says. “For me, this is about the lives and livelihoods of hundreds of dedicated employers and their families.”
Because MetLife says it has negotiated as much as it can about saving jobs, Rell said she spoke to Blumenthal about intervening with the DOI. “I know governments role in business acquisitions is limited,” she says. “But MetLife needs to know that I will fight for these jobs in every way possible.”
Andrew Kligerman, an analyst with UBS Investment Research, New York, comments, however, that he fears MetLife may eliminate too few jobs.
If Rell succeeds at keeping MetLife from streamlining Travelers, MetLife could fail to meet its cost-cutting goal, Kligerman writes.
He sees the job controversy is just one of several risks to MetLifes return on equity. “The deal appears to offer limited strategic benefit other than scale,” he writes.
MetLife issued a statement that it is trying to find a middle ground between the advocates and opponents of job cuts.
“Our decision on jobs is based on MetLife making a business decision on how best to merge two businesses while at the same time being sensitive to the jobs situation in Hartford,” the company says.
Reproduced from National Underwriter Edition, April 15, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.