Voya Financial, Inc. (‘Voya') announced that it has entered into a definitive agreement with Allianz Global Investors (‘AllianzGI') whereby Voya will integrate certain assets and teams comprising the substantial majority of its U.S. business (‘AGI U.S.') with Voya Investment Management (‘Voya IM'), the asset management business of Voya Financial. AllianzGI and Voya Financial initially announced on May 17, 2022 that the companies had entered into a memorandum of understanding regarding the strategic partnership. Through the transaction, Voya IM will integrate AGI U.S.'s talented, highly complementary and internationally established income and growth, fundamental equity, and private placement investment teams and the associated assets under management (AUM) into Voya IM.

Voya IM will also add select distribution and business enablement teams from AGI U.S. On a pro forma basis and based on AUM as of March 31, 2022, Voya IM's AUM would increase to approximately $370 billion. In addition, Voya IM and AllianzGI have formed a long-term strategic distribution partnership whereby AllianzGI will distribute Voya IM's investment strategies outside the U.S. and Canada. This arrangement will allow Voya IM to benefit from AllianzGI's diverse, global reach, and enable Voya IM to offer its attractive U.S. asset-based investment strategies to an even larger client base.

AllianzGI has more than 500 relationship managers in 19 locations across Europe and Asia-Pacific. The transaction is expected to provide several financial benefits for Voya, including immediate, cash accretion to the company's adjusted operating earnings per share (EPS), estimated at 6% – 8% for 2023. In addition, Voya IM's adjusted operating margin is expected to increase to 30% – 32%.

The transaction requires no external financing or use of Voya's excess capital, preserving Voya's future flexibility and opportunities to achieve the company's long-term adjusted operating EPS growth plans. The partnership would further diversify Voya IM's client base by adding international and retail clients to Voya IM's already strong reach among U.S. institutional investors and advisors. As a result of the transaction, non-U.S. clients would represent approximately 30% of AUM managed by Voya IM, up from approximately 10% as of March 31, 2022.

Retail clients would also expand to approximately 40% of AUM. Hurtsellers and Voya IM's chief investment officers will continue in their roles leading Voya IM and its investment platforms, respectively. This will ensure continuity of Voya IM's investment approach and strategy, which includes leveraging Voya's award-winning, ethical culture, as well as the firm's investments in data, analytics and technology to meet the increasing needs of its clients.

The terms of the transaction provide robust protection for Voya against any and all legal or regulatory liabilities related to AllianzGI's other business activities, including all activities in the U.S. prior to the close of the transaction. The terms also provide certain protections for attrition of assets. Voya and AllianzGI expect the transaction to close no later than July 25, 2022, at which time Voya will have full operational control of the business.

Goldman Sachs & Co. LLC is serving as financial advisor and Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel to Voya in connection with this transaction. PJT Partners is also providing certain advisory services in connection with the transaction.