MetLife Resumes Buybacks With Its Largest Ever, for $3 Billion
November 10 2016 - 7:50AM
Dow Jones News
MetLife Inc. said its board has approved $3 billion for share
repurchases, following a halt in its program to return capital to
shareholders as it planned for a divestiture of slower-growing,
more capital-intensive businesses.
The nation's biggest life insurer by assets put its buyback
program on hold in early 2016 as it worked to hive off about a
quarter of its $952.9 billion in assets into a new company. The
spinoff, to be called Brighthouse Financial, is expected to take
place as early as the first quarter. In halting buybacks, MetLife
said it couldn't buy back shares while it had material nonpublic
information related to divestiture planning.
The New York insurer said its board's approval of the fresh $3
billion allocation is its largest ever.
"Excess capital belongs to our shareholders, and we are pleased
to announce our largest-ever buyback authorization," said Steven A.
Kandarian, MetLife's Chairman, President and CEO. "This buyback
authorization shows that our strategy of generating higher free
cash flow is generating momentum."
The divestiture is motivated by both strategic and regulatory
reasons. The remaining MetLife will focus on higher-return
businesses, including insurance sold to employers for benefits'
programs and international life-insurance operations. One benefit
of the divestiture is that the smaller, new company is expected to
avoid potentially stiff regulation as a "systemically important
financial institution" by the Federal Reserve, allowing it to
better compete with rivals.
MetLife was tagged a "SIFI" in 2014 but successfully challenged
it in federal court, winning a ruling that is now under appeal by
the government.
From 2000 through 2008, MetLife's board periodically approved $1
billion buyback allocations, then halted the activity amid the
global markets meltdown of late 2008. The company resumed buybacks
in 2014 with a $1 billion program, followed by a $1 billion
allocation in December 2014 and a $739.3 million allocation in
September 2015, before the halt for the divestiture.
Write to Leslie Scism at leslie.scism@wsj.com
(END) Dow Jones Newswires
November 10, 2016 07:35 ET (12:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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