Macquarie Downgrades Fidelity & Guaranty Life (FGL) to Neutral

Anbang Insurance Group is set to buy Fidelity & Guaranty Life (NYSE:FGL) in a deal that is now valued at $1.57 billion.

Fidelity and Guaranty Life (NYSE:FGL), A reduction of 82,905 shares or 17.2% was observed in the short interest of Fidelity & Guaranty Life The interest on October 30,2015 came in at 399,895 shares and as per the average daily trading of 62,313 shares, the days to cover are 6. The deal will allow the privately held company to become one of the largest insurers of fixed indexed annuity products in the country.

Macquarie downgraded shares of Fidelity & Guaranty Life (NYSE:FGL) from an outperform rating to a neutral rating in a report published on Tuesday, The Fly reports.

Subject to regulatory approvals and satisfaction of other customary closing conditions, the deal is expected to complete in the second quarter of 2016.

According to Reuters, Paul Newsome analyst Sandler O’Neill said that there has been a broad trend of consolidation within the insurance business which could accelerate this year.

The deal with FGL is expected to enhance the growth of Anbang’s business with FGL’s solid life and fixed indexed annuity platforms. Inc. and former CEO of insurance giant AIG Inc., said that the acquisition will boost Anbang’s presence in the U.S. FGL has about 700,000 policyholders and offers life insurance and annuities which provide income to retirees.

The transaction will make Anbang…

Fidelity’s parent company, New York-based HRG Group, announced earlier this year it was exploring “strategic alternatives” for its 80.6 percent stake in the company.

In July, White Mountains Insurance (WTM.N) agreed to sell its property and casualty reinsurer Sirius worldwide Insurance Group Ltd to a unit of China Minsheng Investment Corp Ltd for about $2.24 billion. China Minsheng Investment Corp., Fosun global Ltd., Japan’s Dai-Ichi Life Insurance Co. and Sumitomo Life Insurance Co. have all struck deals in the US or Bermuda recently.