Prudential Financial said it would sell its full-service retirement business to a unit of Canada’s Great-West Lifeco for $3.55 billion as the life insurer continues implementing Chief Executive Officer Charles Lowrey’s three-year transformation plan.
The business will be purchased by Great-West’s Greenwood Village, Colorado-based Empower Retirement division. Prudential expects total proceeds of about $2.8 billion from the sale, which is expected to close in the first quarter of next year, the companies said in a statement.
Great-West agreed last year to buy Massachusetts Mutual Life Insurance’s retirement-services arm for $3.4 billion. This deal will boost Empower’s customer base by about 4 million people to 16.6 million participants.
“Empower’s acquisition of Prudential’s full-service retirement business will add significant scale and capabilities, further solidifying its leadership position in the world’s largest retirement market,” Great-West CEO Paul Mahon said in a separate statement.
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“Today’s announcement is a significant milestone in Prudential’s transformation and the execution of our strategy to become a higher-growth, less market-sensitive, more-nimble business,” Lowrey said in the statement.
The deal comes as insurers part with retirement-related assets to focus on core operations. Prudential, based in Newark, New Jersey, said it will use proceeds from the transaction for general corporate purposes. It now plans to increase capital returned to shareholders by 2023 to $11 billion from the $10.5 billion announced in May and will reduce financial leverage.
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