Acquisition Will Advance New York Life’s
Mission of Providing Financial Security and Peace of Mind to
Individuals, Families, and Businesses
Transaction Allows Cigna to Increase Focus on
Core Growth Platforms; Cigna’s Board Increases Share Repurchase
Authority to $4.0 Billion
New York Life, America’s largest mutual life insurer, and Cigna,
a leading global health service company, announced today that they
have entered into a definitive agreement whereby New York Life will
acquire Cigna’s group life and disability insurance business for
$6.3 billion. The acquisition is expected to close in the third
quarter of 2020, subject to applicable regulatory approvals and
other customary closing conditions.
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“This transaction increases the value we can deliver to our
policy owners, strengthens our well-defined business model, and
adds millions of customers to the New York Life family,” said New
York Life Chairman and CEO Ted Mathas. “Cigna’s group life and
disability business enhances our portfolio of strategic businesses
and is led by an experienced management team and high-quality
workforce, who we look forward to welcoming to our company. We are
fully committed to making this transition as seamless as possible
for employees and clients alike.”
The group life and disability insurance business will operate
within New York Life’s portfolio of strategic businesses, which,
like Cigna’s Group Insurance business, are industry leaders, highly
profitable, and fully support New York Life’s core retail life
insurance franchise. These businesses reinforce New York Life’s
overall financial strength by generating capital that can
contribute to its surplus, dividends, and earnings, which directly
benefits the company’s policy owners. In addition, the Cigna Group
Insurance employees, as well as the employees who primarily support
the acquired business, will transfer to New York Life.
“We are proud of what we have achieved in our life and
disability business, and the world-class team that powers it. We
are confident that clients and customers, including the many who
also receive health and related benefits through Cigna, will
continue to enjoy the high-quality benefits solutions and service
for which this business is known,” said Matt Manders, Cigna’s
President of Strategy and Solutions.
“Our team is excited to become a part of New York Life and
continue to focus on the mission of providing financial security
and peace of mind to individuals, families, and businesses across
the country while our unwavering commitment to focusing on
productivity will continue,” said William Smith, President of Cigna
Group Insurance. “We look forward to continuing our relationships
with our valued customers and clients. New York Life is a
highly-respected brand in our industry and has the capital,
commitment, and trust to help us grow and thrive going
In a multi-year collaboration, following closing, the parties
will continue to bring an integrated Health / Group offering to
clients and prospects who desire it.
New York Life will pay Cigna cash consideration of $6.3 billion.
The transaction is not subject to a financing condition at closing.
Cigna expects to realize approximately $5.3 billion of net
after-tax proceeds from this transaction. Cigna expects to utilize
proceeds of the transaction for share repurchase and repayment of
debt in 2020. Cigna’s Board of Directors has increased the
company’s share repurchase authority by $3.0 billion to an
aggregate amount of $4.0 billion.
Cigna expects the impact of the transaction to be neutral to
earnings per share in 2020 and modestly accretive to earnings per
share in 2021. Cigna continues to expect to meet its deleveraging
commitments made following the Express Scripts combination.
Credit Suisse Securities (USA) LLC is acting as financial
advisor and Debevoise & Plimpton LLP is serving as legal
advisor to New York Life.
BofA Securities is acting as financial advisor to Cigna. Sidley
Austin LLP is serving as lead legal counsel, and Paul, Weiss,
Rifkind, Wharton & Garrison LLP is serving as antitrust
counsel, to Cigna. Wachtell, Lipton, Rosen & Katz is also
advising Cigna on the transaction.
About New York Life
New York Life Insurance Company (www.newyorklife.com), a Fortune
100 company founded in 1845, is the largest mutual life insurance
company in the United States* and one of the largest life insurers
in the world. Headquartered in New York City, New York Life’s
family of companies offers life insurance, retirement income,
investments, and long-term care insurance. New York Life has the
highest financial strength ratings currently awarded to any U.S.
life insurer from all four of the major credit rating
*Based on revenue as reported by “Fortune 500 ranked within
Industries, Insurance: Life, Health (Mutual),” Fortune magazine,
6/1/19. For methodology, please see
**Individual independent rating agency commentary as of 9/12/19:
A.M. Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa),
Standard & Poor’s (AA+).
Cigna Corporation (NYSE: CI) is a global health service company
dedicated to improving the health, well-being and peace of mind of
those we serve. Cigna delivers choice, predictability,
affordability and access to quality care through integrated
capabilities and connected, personalized solutions that advance
whole person health. All products and services are provided
exclusively by or through operating subsidiaries of Cigna
Corporation, including Cigna Health and Life Insurance Company,
Cigna Life Insurance Company of New York, Connecticut General Life
Insurance Company, Express Scripts companies or their affiliates,
and Life Insurance Company of North America. Such products and
services include an integrated suite of health services, such as
medical, dental, behavioral health, pharmacy, vision, supplemental
benefits, and other related products including group life, accident
and disability insurance.
Cigna maintains sales capability in over 30 countries and
jurisdictions, and has more than 165 million customer relationships
throughout the world. To learn more about Cigna®, including links
to follow us on Facebook or Twitter, visit www.cigna.com.
- The timing and actual number of shares repurchased will depend
on a variety of factors, including price, general business and
market conditions, and alternate uses of capital. The share
repurchase program may be effected through open market purchases or
privately negotiated transactions in compliance with Rule 10b-18
under the Securities Exchange Act of 1934, as amended, including
through Rule 10b5-1 trading plans. The program may be suspended or
discontinued at any time.
- Earnings per share means adjusted income from operations on a
fully diluted basis. At the consolidated level, adjusted income
from operations is not determined in accordance with accounting
principles generally accepted in the United States (“GAAP”) and
should not be viewed as a substitute for the most directly
comparable GAAP measure, shareholders’ net income. Adjusted income
(loss) from operations is defined as shareholders’ net income
(loss) excluding the following adjustments: earnings contributions
from transitioning pharmacy benefit management clients, Anthem Inc.
and Coventry Health Care, Inc., net realized investment results,
amortization of acquired intangible assets, and special items.
Adjusted income (loss) from operations is measured on an after-tax
basis for consolidated results.
CIGNA FORWARD LOOKING STATEMENTS
This press release, and oral statements made in connection with
this release, may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on Cigna's current
expectations and projections about future trends, events and
uncertainties. These statements are not historical facts.
Forward-looking statements include statements relating to the
impact of the sale of Cigna’s group disability and life insurance
business, including, without limitation, the impact of the
transaction on Cigna’s projected earnings per share, Cigna’s share
repurchase, debt repayment and other capital deployment plans, the
projected closing date for the transaction and the projected impact
of the transaction on the parties. You may identify forward-looking
statements by the use of words such as “believe,” “expect,” “plan,”
“intend,” “anticipate,” “estimate,” “predict,” “potential,” “may,”
“should,” “will” or other words or expressions of similar meaning,
although not all forward-looking statements contain such terms.
Forward-looking statements are subject to risks and
uncertainties, both known and unknown, that could cause actual
results to differ materially from those expressed or implied in
Such risks and uncertainties include, but are not limited to:
receipt of the regulatory approvals necessary for the transaction;
the satisfaction or waiver of closing conditions for the
transaction; effects on the business as a result of uncertainty
surrounding the proposed transaction; as well as more specific
risks and uncertainties discussed in Cigna’s most recent report on
Form 10-K and subsequent reports on Forms 10-Q and 8-K available on
the Investor Relations section of www.cigna.com. You should not
place undue reliance on forward-looking statements, which speak
only as of the date they are made, are not guarantees of future
performance or results, and are subject to risks, uncertainties and
assumptions that are difficult to predict or quantify. Cigna
undertakes no obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise, except as may be required by law.
version on businesswire.com: https://www.businesswire.com/news/home/20191218005397/en/
For New York Life: Kevin Heine (212) 576-5671
Jacqueline Meere (212) 576-5301
For Cigna: Will McDowell, Investor Relations (215)
761-4198 firstname.lastname@example.org Ellie Polack, Media Relations
(860) 902-4906 email@example.com
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