Chubb Limited (NYSE:CB) definitive agreement to acquire A&H and life business in Six Asia-Pacific Markets and Interest in Cigna Finans Emeklilik ve Hayat A.S. from Cigna Corporation (NYSE:CI) and Cigna Nederland Gamma B.V. for $5.8 billion on October 7, 2021. Under the terms of agreement, Chubb is paying purchase consideration of $5.75 billion in cash. As a part of acquisition, Chubb is acquiring the operations that include Cigna's A&H and life business in Korea, Taiwan, New Zealand, Thailand, Hong Kong and Indonesia and its interest in a joint venture in Turkey i.e., acquiring 51% interest in Cigna Finans Emeklilik ve Hayat A.S. from Cigna Nederland Gamma B.V. Upon completion of the transaction, Asia-Pacific's share of Chubb's global portfolio will increase from approximately $4 billion to $7 billion in premium and represent approximately 20% of the company (excluding China). As a part of acquisition, 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. The transaction has been funded from cash on hand and Chubb may ultimately issue up to $1.1 billion of senior notes to fund the purchase price. 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. With the deal, around 20 percent of Chubb's business will be conducted in Asia going forward.

The transaction is subject to required regulatory approvals and customary closing conditions and the $5.75 billion cash consideration is not contingent upon financing, no shareholders' approval is required and Cigna expects to realize approximately $5.4 billion of net after-tax proceeds from this transaction. The transaction is expected to be completed in 2022. Korea deal is likely to close first in 2022. The transaction is expected to close in the second quarter of 2022. 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. Upon close, the transaction is expected to be immediately accretive to Chubb's core operating earnings per share and return on equity (ROE) for full-year 2023 by 6% and approximately 55 basis points, respectively. Deal ROE goes from 11% to 14% over five years after PGAAP adjustments. The company also expects a strong return on investment (ROI), with a three-year ROI of 15% and an IRR of approximately 20%. The tangible book value per share dilution is expected to earn back within six months. There is strong, steady cash generation with high dividend payout capacity of approximately 70% of operating income. The company will maintain its strong balance sheet and does not expect the transaction to impact its current AA investment grade rating or its capital management commitments, including its current share repurchase program and annual dividend.

Andrew Gerlach, Rodge Cohen, Joonkeun Yoo, Marc Treviño, David Spitzer, Mehdi Ansari, Michael Rosenthal and Joseph Matelis of Sullivan & Cromwell LLP acted as legal advisors to Chubb Limited. Wachtell, Lipton, Rosen & Katz LLP and Baker & McKenzie LLP acted as legal advisors to Cigna Corporation and Cigna Nederland Gamma B.V.. Ernst & Young Strategy and Transactions Limited acted as financial advisor to Cigna Corporation.

Chubb Limited (NYSE:CB) completed the acquisition of A&H and life business in Six Asia-Pacific Markets and Interest in Cigna Finans Emeklilik ve Hayat A.S. from Cigna Corporation (NYSE:CI) and Cigna Nederland Gamma B.V. On July 1, 2022. Chubb Limited (NYSE:CB) completed the acquisition of A&H and life business in Six Asia-Pacific Markets and Interest in Cigna Finans Emeklilik ve Hayat A.S. from Cigna Corporation (NYSE:CI) and Cigna Nederland Gamma B.V. July 1, 2022. As of July 1, 2022, the consideration was revised to $5.36 billion for the operations, which include Cigna's accident and health (A&H) and life business in Korea, Taiwan, New Zealand, Thailand, Hong Kong and Indonesia. The reduction in the final purchase price from the original announcement reflects the impacts of rising interest rates and foreign exchange rates on acquired book value and other minor adjustments. As the part of transaction nearly 3,000 new colleagues are now part of Chubb. Together, the leadership and talented professionals of Chubb and Cigna will enable us to provide greater value to our customers, distribution partners, and shareholders. In Korea, the business will continue to operate under the LINA name, but with a fresh look that aligns with the Chubb brand. In other markets, the businesses will be rebranded as Chubb as the integration progresses and operating entities are combined.