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Hartford Financial Services shares up after agreeing to offload Talcott Resolution operations

The deal will result in a net loss of about US$3.2bn, which will be recorded as discontinued operations in the fourth quarter of 2017
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Bombara said the company is evaluating opportunities to use the proceeds from the sale, including approximately US$400mln for additional debt repayment.

Hartford Financial Services Group Inc (NYSE:HIG) saw its shares rise in premarket trade after announcing that it has agreed to sell off its Talcott Resolution run-off life and annuity business to a group of investors.

Under the US$2.05bn deal, the group of investors will form a new company to buy Hartford Life Inc., the holding company of the Talcott subsidiaries, for US$1.44bn in cash.

In premarket, its shares were up 2.82% at US$59.05.

Deal to result in net loss of US$3.2bn

The purchase agreement also includes a 9.7% stake in the new company valued at US$164mln, an expected US$300mln in a pre-closing dividend from Talcott and a reduction in long-term debt by US$143mln.

In a statement, Hartford said about 400 of its employees will become employees of the new company.

The deal will result in a net loss of about US$3.2bn, which will be recorded as discontinued operations in the fourth quarter of 2017.

"We believe that this transaction provides an excellent outcome for shareholders, although it results in a GAAP loss," said Chief Financial Officer Beth Bombara.

"It accelerates the return of capital from Talcott Resolution compared with the gradual run-off of the business."

Bombara said the company is evaluating opportunities to use the proceeds from the sale, including approximately US$400mln for additional debt repayment.

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Hartford Financial Services Timeline

Newswire
March 21 2012

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