US insurer MetLife Inc (NYSE:MET) on Friday said it had reached an agreement worth some USD2bn (EUR1.5bn) to buy Chilean private pension fund manager AFP Provida SA, majority owned by Spanish bank Banco Bilbao Vizcaya Argentaria SA (MCE:BBVA).
Under the deal terms, MetLife will launch a public cash tender offer for Provida’s shares in the US and Chile, it said, adding that BBVA had agreed to transfer its 64.3% in the Chilean unit to MetLife.
The transaction, which also includes a small asset management business in Ecuador, will boost MeLife’s presence in emerging markets, in line with its strategic focus, the buyer said. The US group, which leads the insurance and annuities sectors in Chile, will further enhance its position in the country with the addition of Provida. The move also serves its plans to shift operations mix to less capital intensive products, MetLife explained. It expects the combination with Provida to immediately increase its earnings.
Apart from the agreed purchase price, Provida shareholders will also receive dividends from excess cash and proceeds from the sale of the firm’s minority stakes in Mexico and Peru businesses, which are not included in the deal with MetLife.
MetLife expects to complete the acquisition in the third quarter of this year, subject to regulatory approvals.
Provida managed assets worth USD45.3bn as of 30 September 2012.
BofA Merrill Lynch, Skadden, Arps, Slate, Meagher & Flom LLP and Prieto y Cia are advising MetLife.