Agreement will sharpen Cigna's focus on the growth path for its rapidly expanding global health portfolio
BLOOMFIELD, Conn., Oct. 8, 2021 /PRNewswire/ -- Cigna Corporation (NYSE:CI), a global health service company, today announced a definitive agreement with Chubb (NYSE: CB) to sell its life, accident and supplemental benefits businesses in seven countries for $5.75 billion dollars. The transaction is expected to be completed in 2022, subject to applicable regulatory approvals and customary closing conditions.
"Our agreement with Chubb is another step forward in advancing our strategic focus on our global health services portfolio," said David M. Cordani, president and chief executive officer, Cigna Corporation. "We are proud of our success in building these life, accident and supplemental benefits businesses in Asia Pacific and improving the well-being and sense of security of our customers throughout the region."
Upon completion of the transaction, Chubb will acquire Cigna's life, accident and supplemental benefits businesses in Hong Kong, Indonesia, Korea, New Zealand, Taiwan and Thailand as well as Cigna's interest in a joint venture in Turkey. In Korea, Chubb will acquire and plans to continue to operate the business under the LINA Korea (Life Insurance Company of North America Korea) brand.
Cigna will continue to operate its robust international health businesses for the globally mobile population, as well as local market services in the Middle East, Europe, Hong Kong, Singapore and its joint ventures in Australia, China and India.
Chubb will pay Cigna a cash consideration of $5.75 billion. The transaction is not subject to a financing condition and Cigna expects to realize approximately $5.4 billion of net after-tax proceeds from this transaction. Cigna expects to utilize the proceeds from the transaction primarily for share repurchase, broadly consistent with Cigna's capital deployment framework. The impact of the transaction is expected to be neutral to slightly dilutive to Cigna's earnings per share in 2022.
"The addition of Cigna's business, which is overwhelmingly A&H, will rebalance our global portfolio toward this important region," said Evan G. Greenberg, chairman and chief executive officer, Chubb. "We have long admired and respected Cigna's business in Asia including its talented people, innovative products, technical and analytical capabilities, distribution and management."
Cigna and Chubb are committed to ensuring a smooth transition for customers, partners, clients and employees throughout this period.
Wachtell, Lipton, Rosen & Katz is serving as lead legal counsel, and Baker McKenzie is serving as lead regulatory counsel on the transaction.
About Cigna 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, Connecticut General Life Insurance Company, Evernorth companies or their affiliates, and Express Scripts companies or their affiliates. 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.
Cigna maintains sales capability in over 30 countries and jurisdictions, and has over 190 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 (or income before taxes for the segment metric) excluding net realized investment results, amortization of acquired intangible assets and special items. Cigna's share of certain realized investment results of its joint ventures reported in the International Markets segment using the equity method of accounting are also excluded. 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 life, accident and supplemental benefits businesses, including, without limitation, the impact of the transaction on Cigna's projected earnings per share, Cigna's share repurchase 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 forward-looking statements. 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.