Equitable, Corebridge to merge in $22 billion all-stock deal

March 26 (Reuters) – Insurers Equitable and Corebridge said on Thursday they will merge in an all-stock deal that would create a $22 billion U.S. retirement, life insurance and asset management company.

The deal will create a combined company with more than $1.5 trillion in assets under management and administration and over 12 million customers.

Insurers are looking to get bigger to stay competitive, grow their business, keep more earnings and strengthen their position in retirement and wealth markets.

Shares of Corebridge, which was carved out of AIG in 2022, rose 2.4% in premarket trading.

“The combined company will benefit from a strong competitive position and accelerated growth across retirement, life and institutional markets, as well as asset and wealth management,” Equitable CEO Mark Pearson said.

The deal brings together three franchises – Corebridge, Equitable, and AllianceBernstein to create a diversified financial services company.

Each outstanding share of Corebridge stock will be exchanged for 1 share of the new parent company, while each outstanding share of Equitable stock will be exchanged for 1.55516 shares of the new parent company’s stock.

The combined entity will be headquartered in Houston, Texas, and operate under the Equitable name. It is expected to generate more than $5 billion of operating earnings.

Corebridge shareholders will own about 51% of the combined company, while Equitable investors will hold roughly 49%.

The deal, which is targeted to close by the end of 2026, is expected to boost earnings by over 10% by the end of 2028.

Corebridge CEO Marc Costantini will lead the combined company, while Equitable CEO Mark Pearson will serve as executive chair.

Morgan Stanley advised Corebridge, while Goldman Sachs advised Equitable.

(Reporting by Prakhar Srivastava and Arasu Kannagi Basil in Bengaluru; Editing by Maju Samuel)