MetLife, Inc. (NYSE: MET) announced today it has entered into a
definitive agreement with BBVA to acquire AFP Provida S.A. (“Provida”),
the largest private pension fund administrator in Chile. Under the terms
of the agreement, MetLife will conduct a public cash tender offer for
all of the outstanding shares of Provida, and BBVA has agreed to
transfer its 64.3% stake to MetLife. Assuming all publicly-held shares
are tendered, the purchase price, which MetLife will fund from its
existing cash balances, would be approximately $2 billion.
In addition to the purchase price payable by MetLife in the tender
offer, Provida shareholders are expected to receive from Provida, prior
to the closing, dividends representing excess cash as well as the
proceeds from the sale of Provida’s minority stakes in other businesses
in Mexico and Peru, which are not being acquired by MetLife.
The acquisition of Provida aligns with MetLife’s strategic focus, which
includes capitalizing on growth opportunities in emerging markets. The
transaction also includes a small asset management business in Ecuador.
“With this acquisition, MetLife is delivering on a key component of our
strategy – expanding our presence in emerging markets,” said Steven A.
Kandarian, chairman, president and chief executive officer of MetLife,
Inc. “MetLife is a leader in both life insurance and annuities in Chile,
and Provida will further strengthen our position by adding the country’s
top pension franchise. The acquisition also supports our focus on
shifting our business mix to less capital intensive products. We expect
it to be immediately accretive to earnings.”
With the acquisition of Provida, MetLife’s operating earnings from
emerging markets are expected to grow from 14% today to approximately
17%. At current exchange rates on an unaudited IFRS accounting basis,
net income for the businesses to be acquired, based on information
publicly filed by Provida, was approximately $189 million for the 12
month period ended September 30, 2012. The transaction, which is
anticipated to close in the third quarter of 2013, is expected to
provide operating earnings accretion of approximately $0.05 per share in
2013 and $0.15 per share in 2014.
As of September 30, 2012, Provida had $45.3 billion in assets under
management and 1.8 million contributors, both of which are the most in
the Chilean pension industry.
“The assets, customers and intellectual capital this transaction brings
into the MetLife family of businesses will transform our operations in
Chile,” said William J. Wheeler, president, the Americas, MetLife, Inc.
“We have great appreciation for the Provida franchise, and we believe
their talented employees will be key to helping us reach our growth
targets in the market.”
The tender offer described herein will be conducted in Chile and the
United States and will be for all of the outstanding ordinary shares and
American Depositary Shares of Provida.
The transaction, which is subject to receipt of certain regulatory
approvals and other customary conditions, has been approved by the board
of directors of MetLife.
BofA Merrill Lynch acted as financial advisor to MetLife. Skadden, Arps,
Slate, Meagher & Flom LLP and Prieto y Cia served as legal advisors.
MetLife, Inc. is a leading global provider of insurance, annuities and
employee benefit programs, serving 90 million customers. Through its
subsidiaries and affiliates, MetLife holds leading market positions in
the United States, Japan, Latin America, Asia, Europe and the Middle
East. For more information, visit www.metlife.com.
This press release may contain or incorporate by reference information
that includes or is based upon forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements give expectations or forecasts of future
events. These statements can be identified by the fact that they do not
relate strictly to historical or current facts. They use words such as
“anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,”
“believe” and other words and terms of similar meaning in connection
with a discussion of future operating or financial performance. In
particular, these include statements relating to future actions,
prospective services or products, future performance or results of
current and anticipated services or products, sales efforts, expenses,
the outcome of contingencies such as legal proceedings, trends in
operations and financial results.
Any or all forward-looking statements may turn out to be wrong. They can
be affected by inaccurate assumptions or by known or unknown risks and
uncertainties. Many such factors will be important in determining the
actual future results of MetLife, Inc., its subsidiaries and affiliates.
These statements are based on current expectations and the current
economic environment. They involve a number of risks and uncertainties
that are difficult to predict. These statements are not guarantees of
future performance. Actual results could differ materially from those
expressed or implied in the forward-looking statements. Risks,
uncertainties, and other factors that might cause such differences
include the risks, uncertainties and other factors identified in
MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission
(the “SEC”). These factors include: (1) difficult conditions in the
global capital markets; (2) concerns over U.S. fiscal policy and the
“fiscal cliff” in the U.S., as well as rating agency downgrades of U.S.
Treasury securities; (3) uncertainty about the effectiveness of
governmental and regulatory actions to stabilize the financial system,
the imposition of fees relating thereto, or the promulgation of
additional regulations; (4) increased volatility and disruption of the
capital and credit markets, which may affect our ability to seek
financing or access our credit facilities; (5) impact of comprehensive
financial services regulation reform on us; (6) economic, political,
legal, currency and other risks relating to our international
operations, including with respect to fluctuations of exchange rates;
(7) exposure to financial and capital market risk, including as a result
of the disruption in Europe and possible withdrawal of one or more
countries from the Euro zone; (8) changes in general economic
conditions, including the performance of financial markets and interest
rates, which may affect our ability to raise capital, generate fee
income and market-related revenue and finance statutory reserve
requirements and may require us to pledge collateral or make payments
related to declines in value of specified assets; (9) potential
liquidity and other risks resulting from our participation in a
securities lending program and other transactions; (10) investment
losses and defaults, and changes to investment valuations; (11)
impairments of goodwill and realized losses or market value impairments
to illiquid assets; (12) defaults on our mortgage loans; (13) the
defaults or deteriorating credit of other financial institutions that
could adversely affect us; (14) our ability to address unforeseen
liabilities, asset impairments, or rating actions arising from
acquisitions or dispositions, including our acquisition of American Life
Insurance Company and Delaware American Life Insurance Company
(collectively, “ALICO”) and to successfully integrate and manage the
growth of acquired businesses with minimal disruption; (15) uncertainty
with respect to the outcome of the closing agreement entered into with
the United States Internal Revenue Service in connection with the
acquisition of ALICO; (16) the dilutive impact on our stockholders
resulting from the settlement of common equity units issued in
connection with the acquisition of ALICO or otherwise; (17) regulatory
and other restrictions affecting MetLife, Inc.’s ability to pay
dividends and repurchase common stock; (18) MetLife, Inc.’s primary
reliance, as a holding company, on dividends from its subsidiaries to
meet debt payment obligations and the applicable regulatory restrictions
on the ability of the subsidiaries to pay such dividends; (19)
downgrades in our claims paying ability, financial strength or credit
ratings; (20) ineffectiveness of risk management policies and
procedures; (21) availability and effectiveness of reinsurance or
indemnification arrangements, as well as default or failure of
counterparties to perform; (22) discrepancies between actual claims
experience and assumptions used in setting prices for our products and
establishing the liabilities for our obligations for future policy
benefits and claims; (23) catastrophe losses; (24) heightened
competition, including with respect to pricing, entry of new
competitors, consolidation of distributors, the development of new
products by new and existing competitors, distribution of amounts
available under U.S. government programs, and for personnel; (25)
unanticipated changes in industry trends; (26) changes in assumptions
related to investment valuations, deferred policy acquisition costs,
deferred sales inducements, value of business acquired or goodwill; (27)
changes in accounting standards, practices and/or policies; (28)
increased expenses relating to pension and postretirement benefit plans,
as well as health care and other employee benefits; (29) exposure to
losses related to variable annuity guarantee benefits, including from
significant and sustained downturns or extreme volatility in equity
markets, reduced interest rates, unanticipated policyholder behavior,
mortality or longevity, and the adjustment for nonperformance risk; (30)
deterioration in the experience of the “closed block” established in
connection with the reorganization of Metropolitan Life Insurance
Company; (31) adverse results or other consequences from litigation,
arbitration or regulatory investigations; (32) inability to protect our
intellectual property rights or claims of infringement of the
intellectual property rights of others; (33) discrepancies between
actual experience and assumptions used in establishing liabilities
related to other contingencies or obligations; (34) regulatory,
legislative or tax changes relating to our insurance, banking,
international, or other operations that may affect the cost of, or
demand for, our products or services, or increase the cost or
administrative burdens of providing benefits to employees; (35) the
effects of business disruption or economic contraction due to disasters
such as terrorist attacks, cyberattacks, other hostilities, or natural
catastrophes, including any related impact on our disaster recovery
systems, cyber- or other information security systems and management
continuity planning; (36) the effectiveness of our programs and
practices in avoiding giving our associates incentives to take excessive
risks; and (37) other risks and uncertainties described from time to
time in MetLife, Inc.’s filings with the SEC.
MetLife, Inc. does not undertake any obligation to publicly correct or
update any forward-looking statement if MetLife, Inc. later becomes
aware that such statement is not likely to be achieved. Please consult
any further disclosures MetLife, Inc. makes on related subjects in
reports to the SEC.
Important Notice
The tender offer described herein has not yet commenced. The description
contained herein is for informational purposes only and is not an offer
to buy or the solicitation of an offer to sell any securities. At the
time the tender offer is commenced, it shall be conducted in accordance
with applicable law in Chile and the United States, and MetLife, Inc. or
one or more of its wholly-owned affiliates will file a tender offer
statement on either Schedule TO or Form CB with the Securities and
Exchange Commission (the “Commission”) (and such documentation as may be
required to be filed with applicable government authorities in Chile),
and Provida will file a solicitation/recommendation statement on
Schedule 14D-9 (and such documentation as may be required to be filed
with applicable government authorities in Chile) with respect to the
tender offer. Investors and holders of Provida shares are strongly
advised to carefully read the tender offer statement (including the
offer to purchase, the letter of transmittal (or Chilean equivalent, if
applicable) and the related tender offer documents) and the related
solicitation/recommendation statement when they become available, as
they will contain important information, including the various terms of,
and conditions to, the tender offer. Once filed, investors and holders
of Provida shares will be able to obtain free copies of these documents
and other documents filed by MetLife, Inc., Provida and BBVA with the
Securities and Exchange Commission at the website of the Commission at www.sec.gov.
In addition, the tender offer statement, solicitation/recommendation
statement and related materials may be obtained for free when they
become available from MetLife, Inc. or Provida.
If commenced, the tender offer shall be governed in accordance with the
applicable laws in Chile and in the United States.
