December 21, 2017

Exiting annuities, Voya eyes $1B stock buyback

Voya website
Voya website
Voya's Windsor campus

New York's Voya Financial, with major Windsor operations, says it's divesting its annuity assets, pushing it closer to operating exclusively as a provider of retirement and wealth services and financial products.

Voya Chairman and CEO Rodney O. Martin Jr. said Thursday it will divest nearly all of its closed-block variable annuity segment -- accounts valued at about $35 billion -- plus its individual fixed and fixed indexed annuity business to an investor consortium led by affiliates of Apollo Global Management LLC, Crestview Partners and Reverence Capital Partners.

Financial terms weren't disclosed.

Formerly known as ING U.S., Voya said it and Athene Holding Ltd., too, will participate in the consortium, known as Venerable Holdings Inc. Voya said it will hold a 9.9 percent stake in Venerable. It also inked a minimum five-year pact to manage a chunk of Venerable's assets.

Voya said its board has already approved the deal, which should close in the second or third quarter of 2018, pending other customary closing conditions and regulatory approvals.

Martin said the annuities divestiture not only trims Voya's market and insurance risk, but it enables Voya to focus on its more lucrative retirement, investment-management and employee-benefits businesses.

Meantime, Voya said it intends to conduct a strategic review of its individual life business in the first half of 2018.

After the deal, Voya says it expects to generate free annual cash flow between $600 million to $700 million.

Voya also announced Thursday that it intends to repurchase $1 billion of its common stock by next June 30.

Goldman Sachs & Co. LLC is Voya's financial advisor and Willkie Farr & Gallagher LLP is legal counsel.

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