Anbang Said to Plan Reviving Fidelity & Guaranty Application

Updated on
  • Chinese company needs approval from New York to complete deal
  • HRG is trading below 2015 deal price amid investor douts

Anbang Insurance Group Co. has renewed discussions with regulators to seek approval for its $1.6 billion deal to buy U.S. insurer Fidelity & Guaranty Life and has been working with bankers and lawyers to refile an application in coming weeks, according to five people familiar with the Chinese firm’s plan.

Anbang and Des Moines, Iowa-based FGL are looking to complete the deal this year, said four of the people, who asked not to be identified discussing a plan that hasn’t been disclosed publicly. FGL jumped 5.4 percent to $23.63 at 4:02 p.m. in New York.

Still, the stock is trading for less than the deal price of $26.80, amid investor doubts about Anbang’s ability to complete the 2015 agreement. The Chinese firm in March pulled a $14 billion takeover offer for Starwood Hotels & Resorts Worldwide Inc. and then withdrew an application in New York for FGL in May.

The revived effort to complete a transaction for FGL, which is majority owned by HRG Group Inc., could still fall apart, two of the people said. HRG climbed 1.6 percent.

FGL has an investment portfolio of more than $20 billion. The company has about 700,000 policyholders and offers annuities, which provides income to retirees. The New York regulator’s job is to make sure companies can honor obligations to customers.

State Regulators

New York’s watchdog initially had reservations about Anbang’s ownership structure and how it would fund reserves, people familiar with the application said in May. The deal would also need a nod from Iowa’s insurance commissioner, and it has already won approval from the Committee on Foreign Investment in the United States.

Anbang’s ownership includes small-time merchants and villagers in China who control multibillion-dollar stakes, according to a New York Times report this month that said U.S. regulators are reviewing whether they hold those investments on behalf of others. Anbang Vice Chairman Yao Dafeng said an interview this month that the company strictly abides by Chinese laws and regulations.

“Anbang and FGL are committed to closing the merger as expeditiously as possible,” the Chinese company said in a statement Wednesday. A spokesman for New York’s financial regulator declined to comment. FGL didn’t immediately return messages seeking comment.