Swiss to buy Lincoln unit

July 30, 2001 Posted: 0726 GMT

LONDON (CNN) -- Swiss Re agreed on Monday to buy Lincoln National's reinsurance operations for $2 billion.

The world's second-largest reinsurer after Germany's Munich Re said it will integrate the Fort Wayne, Ind.-based Lincoln Re operations into its Swiss Re North American Life & Health unit.

"Lincoln Re is an excellent strategic fit with our plans to expand our life and health reinsurance business globally and to further strengthen our leading life and health reinsurance business in North America," Walter Kielholz, Swiss Re chief executive said.

The Zurich, Switzerland-based company expects the acquisition to be completed by the fourth-quarter of 2000. The company plans to raise equity to fund the acquisition, but will not release further details until it releases half-year earnings on September 7.

In addition to the acquisition, Lincoln will retain $500 million of capital currently supporting the reinsurance unit. Lincoln will repurchase an additional $500 million of its shares, giving it the right to buy shares worth as much as $866 million.

"The divestiture of Lincoln Re is a logical step in Lincoln's strategic evolution from a multilane insurer to a financial services company with a core focus on providing wealth accumulation and protection products and services,"

Lincoln National's chief executive Jon Boscia said.

Note: Search results will open in a new browser window