Fidelity National Financial Inc. announced a deal Feb. 7 to buy an annuity and life insurance company connected to Fidelity Chairman Bill Foley.
Jacksonville-based Fidelity agreed to acquire FGL Holdings for cash and stock valued at $2.7 billion.
FGL operates a Des Moines, Iowa-based company called Fidelity & Guaranty Life, which was bought by an investment company formed by Foley in 2017.
Foley is co-chairman of FGL and controlled 6.7% of the stock, according to FGL’s most recent proxy statement.
Title insurance company Fidelity National Financial was not previously connected to Fidelity & Guaranty Life before Foley’s company bought it. However, Fidelity now owns 7.9% of FGL’s stock.
In a news release, Foley said Fidelity’s board of directors and management decided to buy FGL after the company’s planned acquisition of Stewart Information Services was called off last year.
Foley said Fidelity officials reviewed its “capital allocation strategy and determined that expanding into the annuity market through the acquisition of FGL Holdings would offer compelling benefit to our shareholders.”
Fidelity’s deal with Stewart, another title insurance company, was canceled after the companies could not satisfy state and federal regulators’ antitrust concerns.
Fidelity said it expects the acquisition of FGL to increase earnings per share by 10% this year, on a pro-forma basis, and by 20% in 2021.
CEO Raymond Quirk said in the news release Fidelity’s “size, scale, and financial strength” will help the annuity and life insurance company.
“We see incredible potential in working with the management team to invest in and grow F&G’s business on a national level,” he said.