Fidelity National Financial and F&G Announce the Signing of a Definitive Agreement to Sell F&G Re to Aspida Holdings Ltd.

Rhea-AI Summary

Fidelity National Financial (FNF) and F&G announced a definitive agreement to sell F&G Reinsurance Ltd to Aspida Holdings, an Ares Management subsidiary. F&G Re has around $2 billion in invested assets and focuses on reinsurance solutions for life and annuities. Proceeds will fund growth opportunities at F&G. The transaction includes a flow reinsurance agreement related to F&G's MYGA products. Closing is anticipated in Q4 2020, pending regulatory approval, with no material impact expected on FNF's GAAP results.

Positive

• F&G Re sale enables focus on core retail franchise and growth opportunities.
• Flow reinsurance agreement enhances competitive positioning.

Negative

• None.

JACKSONVILLE, Fla. and DES MOINES, Iowa, Sept. 30, 2020 /PRNewswire/ -- Fidelity National Financial, Inc. ("FNF") (NYSE: FNF) and F&G, a leading provider of annuities and life insurance, announced today that F&G has entered into a definitive agreement (the "Transaction") to sell F&G Reinsurance Ltd ("F&G Re") to Aspida Holdings Ltd. ("Aspida"), an indirect subsidiary of Ares Management Corporation.

F&G Re, a Bermuda-based subsidiary of F&G with approximately $2 billion in invested assets as of June 30, 2020, provides reinsurance solutions to third-party life and annuity companies.  The Transaction is consistent with F&G's strategic focus on its core retail franchise and expanding presence in the bank and broker dealer channel.  Proceeds from the sale of F&G Re will be used for general corporate purposes, including funding growth opportunities at F&G. 

In connection with the Transaction, F&G and Aspida (via F&G Re) will enter into a flow reinsurance agreement with respect to F&G's MYGA products on a coinsurance fund withheld basis.  This reinsurance agreement is expected to further enhance F&G's competitive positioning in new and existing channels.

"We are pleased to announce the sale of F&G Re, our third-party offshore reinsurance platform," said Chris Blunt, President and CEO of F&G.  "The Transaction represents a terrific outcome for F&G Re, its clients and employees, and FNF shareholders.  We look forward to our partnership with Aspida in this important transaction."

The closing of the Transaction, which is expected to occur in the fourth quarter of 2020, is subject to customary closing conditions, including regulatory approval.  The financial terms of the deal were not disclosed, but the Transaction is expected to have no material impact to FNF's GAAP financial results.

About Fidelity National Financial, Inc.

Fidelity National Financial, Inc. (NYSE: FNF) is a leading provider of title insurance and transaction services to the real estate and mortgage industries.  FNF is the nation's largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York - that collectively issue more title insurance policies than any other title company in the United States.  More information about FNF can be found at fnf.com. 

About F&G

F&G is part of the FNF family of companies.  F&G is committed to helping Americans turn their aspirations into reality.  F&G is a leading provider of annuity and life insurance products and is headquartered in Des Moines, Iowa.  For more information, please visit www.fglife.com.

About Ares Management Corporation

Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager operating integrated businesses across Credit, Private Equity and Real Estate. Ares Management's investment groups collaborate to deliver innovative investment solutions and consistent and attractive investment returns for fund investors throughout market cycles. Ares Management's global platform had approximately $165 billion of assets under management as of June 30, 2020 with approximately 1,400 employees operating across North America, Europe and Asia Pacific, pro forma for the acquisition of SSG Capital Holdings Limited which closed on July 1, 2020. For more information, please visit: www.aresmgmt.com.

About Aspida

Aspida Holdings Ltd. ("Aspida") is an indirect subsidiary of Ares Management Corporation, which was created to execute on Ares Insurance Solutions' plans to issue insurance and reinsurance products for individuals and institutions seeking to fund their long-term financial needs. Aspida seeks to be a trusted partner focused on its customers' financial security and success. For more information, please visit: www.aspida.com.

Forward-Looking Statements

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995:  This press release contains, and certain oral statements made by our representatives from time to time may contain, forward-looking statements relating to F&G and FNF, including statements relating to the Transaction and related matters.  Such statements are subject to risks and uncertainties, many of which are beyond the control of FNF, that could cause actual results, events and developments to differ materially from those set forth in, or implied by, such statements.  These statements are based on the beliefs and assumptions of the management of FNF.  Forward-looking statements are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans," "seeks," "estimates," "projects," "may," "will," "could," "might," or "continues" or similar expressions.  Factors that could cause actual results, events and developments to differ include, without limitation:  (1) changes in general economic, business and political conditions, including changes in the financial markets; (2) the outcome of any legal proceedings that may be instituted against F&G or FNF as a result of FNF's recently-completed acquisition of FGL Holdings (the "FGL Mergers"); (3) the risk that the Transaction disrupts current plans and operations of F&G or FNF as a result of the closing thereof; (4) the ability to recognize the anticipated benefits of the FGL Mergers, which may be affected by, among other things, competition, the ability of the management of FNF to grow and manage the combined business profitably and to retain key employees, including those experienced with integration efforts; (5) costs incurred in connection with the FGL Mergers; (6) the possibility of financial impairments as a result of the acquisition accounting in connection with the FGL Mergers; (7) changes in applicable laws or regulations; (8) the possibility that FNF may be adversely affected by other economic, business, and/or competitive factors, as well as the impact on the business, operations, results of operations and trading prices of the shares of FNF arising out of the COVID-19 outbreak; (9) the risk that the businesses will not be integrated successfully, that such integration may be more difficult, time-consuming or costly than expected or that the expected benefits of the acquisition will not be realized; (10) the severity of FNF's title insurance claims; (11) a downgrade of FNF's credit rating by rating agencies; (12) adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding, increased mortgage defaults, or a weak U.S. economy; (13) our business concentration in the States of California, Texas, Florida, New Jersey and Arizona; (14) our potential inability to find suitable acquisition candidates; (15) our dependence on distributions from our title insurance underwriters as our main source of cash flow; (16) competition from other title insurance companies; (17) interest rate fluctuations; (18) equity market volatility; (19) credit risks of our counterparties, including companies with whom we have reinsurance agreements or have purchased call options; and (20) other risks and uncertainties identified in FNF's filings with the U.S. Securities and Exchange Commission.  FNF cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made.  FNF does not undertake or accept any obligation or undertaking to release any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, subject to applicable law.  The information contained in any website referenced herein is not, and shall not be deemed to be, part of or incorporated into this press release.

All forward-looking statements described herein are qualified by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized.  FNF does not undertake any obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, except as required by law.

FNF-G

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SOURCE Fidelity National Financial, Inc.

FAQ

What is the significance of FNF's agreement to sell F&G Reinsurance Ltd?

The sale allows F&G to concentrate on its core retail business and utilize proceeds for growth opportunities.

When is the expected closing date for the transaction involving F&G Re?

The transaction is expected to close in the fourth quarter of 2020, subject to regulatory approval.

What are the financial implications of the F&G Re sale for FNF?

The transaction is expected to have no material impact on FNF's GAAP financial results.

How much in invested assets does F&G Re have?

F&G Re has approximately $2 billion in invested assets as of June 30, 2020.