Chubb to Buy Some Cigna Asia Pacific Units For $5.75 Billion

(Bloomberg) -- Chubb Ltd. will buy Cigna Corp.’s life, accident and supplemental businesses in seven places for $5.75 billion in a deal aimed at boosting its operations in the Asia Pacific region. 

The transaction, which involves Cigna’s businesses in Hong Kong, Indonesia, Korea, New Zealand, Taiwan and Thailand as well as its interest in a joint venture in Turkey, comes months after Chubb was repeatedly rebuffed in its bid to take over Hartford Financial Services Group Inc. for about $25 billion. 

The addition of Cigna’s business will “rebalance our global portfolio toward this important region,” said Evan G. Greenberg, Chubb’s chairman and chief executive officer in a statement late Thursday. 

For Cigna, the move is in line with efforts to get out of other businesses to focus on health-care. The company expects to realize approximately $5.4 billion of net after-tax proceeds from the transaction and plans to utilize the proceeds primarily for share repurchase, it said, with impact likely to be “neutral to slightly dilutive” to earnings per share in 2022. 

Cigna gained 0.5% as of 10:16 a.m. in New York, while Chubb rose 1.9%.

In 2019, Cigna agreed to sell its life and disability insurance business in the U.S. to New York Life Insurance Co. for $6.3 billion. 

The company said it will continue to operate its health insurance businesses outside the U.S., in markets like the Middle East, Europe, Hong Kong, Singapore and joint ventures in Australia, China and India. 

The operations Cigna is selling are part of its international business, which generated about $6 billion in sales last year, or less than 4% of the company’s total annual revenue, according to data compiled by Bloomberg.

The transaction is expected to be completed in 2022, subject to regulatory approvals. 

©2021 Bloomberg L.P.