Financial Advisor

Corebridge, Equitable merge to create potential new annuity sales king. Throughout 2025, Corebridge Financial and Equitable Financial battled to be the biggest annuity seller in a highly competitive market. Corebridge finished third and Equitable fourth in LIMRA's final sales rankings. Corebridge ($27.4 billion) and Equitable ($23.3 billion) combined for more than $50 billion in annuity sales. The Thursday morning merger announcement creates a powerful new annuity behemoth that resets the annuity sales market. The companies announced an agreement to combine in an all-stock merger, valuing the combined company at approximately $22 billion, based on the closing stock prices of each company. The new Equitable will have 10.53% share of the $448.93 billion of annuity sales, Wink, Inc. CEO Sheryl Moore said, making them the top seller of annuities. "These are two of the biggest heavyweights in the life insurance industry, combining into a force to be reckoned with," Moore said. "Their product mix and distribution channels are complementary. In light of this development, I am specifically interested to see if the current top-seller of annuities is going to turn the heat up." The combined company will have $1.5 trillion in assets under management and administration across Individual Retirement, Group Retirement, Asset Management, Wealth Management, Life Insurance and Institutional Markets. The new company will retain the 167-year-old Equitable brand name. "This is a transformational transaction that brings together three outstanding franchises - Corebridge, Equitable and AllianceBernstein - to create a diversified financial services company uniquely positioned to serve customers and deliver long-term value for shareholders," said Mark Pearson, president and CEO of Equitable. "By combining complementary capabilities and scale, we will enhance what we can deliver for clients - more choice, broader access to investment and retirement solutions and the strength of an industry leader with a stronger balance sheet standing behind our promises." Pearson will serve as executive chairman of the new Equitable, while Corebridge CEO Marc Costantini will be the CEO. Corebridge shareholders will own 51% of the new company, Pearson announced during a conference call Thursday morning. A Corebridge shake-up. Despite powerful sales, Corebridge experienced upheaval in recent months. Costantini recently ran his first quarterly call with Wall Street analysts, in what was Chief Financial Officer Elias Habayeb's final call. Costantini replaced former CEO Kevin Hogan at the end of November, a CEO switch announced in September. During Corebridge's third-quarter call, Hogan announced Habayeb's departure for "a senior leadership position at a publicly listed company that we do not consider a competitor." Corebridge reported Q4 net income of $814 million, compared to $2.2 billion in the prior-year quarter. Costantini blamed the loss on lower investment gains, losses linked to Fortitude Re, and changes in the value of certain insurance liabilities. "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," Costantini said of the merger. "With a world-class, multi-channel distribution network and an expanded offering of innovative products, we will create a balanced and resilient business well positioned to serve customers." Upon closing, the transaction is expected to deliver "compelling value to shareholders," Costantini added, including immediate accretion to earnings per share and cash generation, which is projected to increase to over 10% by the end of 2028. Nippon Life Insurance Co. is also on board with the merged companies, said Satoshi Asahi, President of Nippon, which completed a $3.8 billion purchase of a 21.6% stake in Corebridge in early 2025. "The proposed merger is strategically compelling and has the potential to create a more competitive and resilient platform for the long-term benefit of the combined companies' shareholders," Asahi said. "Nippon's three representatives serving on the Corebridge board of directors voted in favor of the transaction. Nippon expects to continue as a long-term strategic investor." The merger is expected to close by year-end 2026, subject to customary closing conditions, including the receipt of required regulatory approvals and approval of shareholders of both Corebridge and Equitable. Combined strengths listed. Equitable and Corebridge released a statement on the strengths of the combined company: Creates a Leading U.S. Retirement, Life, Wealth and Asset Management Platform. The combined company will benefit from a scaled distribution network, more diversified business mix and increased cross-selling opportunities. With expanded offerings across Individual and Group Retirement, enhanced wealth and third-party asset management capabilities and additional capacity for institutional transactions, the combined company will be well-positioned to better serve customers and drive sustainable, long-term growth for shareholders. Expands Origination Capabilities Across All Asset Classes. The combined company will benefit from Equitable's strategic partnership with its majority-owned subsidiary, AllianceBernstein, a leading global active manager with distribution in 21 countries across retail, institutional and private wealth channels as well as asset origination capabilities that are complementary to Corebridge's. Over time, the combined company expects to shift over $100 billion of Corebridge's general and separate account assets to AllianceBernstein, further enhancing its scale and competitive positioning. Unites Two Customer-Centric Organizations with a Shared Vision. The combined company will maintain its focus on disciplined risk management and operational rigor while accelerating its digitization and technology transformation. It will have increased resources as well as access to data systems and advanced technological infrastructure, allowing additional investment in growth initiatives and faster realization of economies of scale. This will support the combined company's transformation and modernization of the customer experience, particularly for its Individual and Group Retirement businesses. Creates Superior Financial Profile with Increased Cash Generation. On a pro-forma basis, the company will have diversified sources of income, with a balanced mix between fees, spreads, and underwriting margin. The combined company is expected to deliver more than $5 billion of operating earnings1 and generate over $4 billion of cash2, increasing financial flexibility to invest in strategic growth initiatives while also returning capital to shareholders. Combines Two Strong Balance Sheets and Enhances Financial Flexibility. At year-end 2025, Corebridge had a Life Fleet RBC Ratio of approximately 435% and holding company cash of $2.3 billion, while Equitable had a Combined NAIC RBC Ratio of approximately 475% and holding company cash of $1.1 billion. On a pro-forma basis, the combined company will have over $30 billion of shareholders' equity excluding AOCI and a leverage ratio of 26%. Immediately Accretive to Earnings Per Share and Cash Generation. The transaction is expected to be immediately accretive to the combined company's earnings per share and cash generation, increasing to over 10% by the end of 2028. Earnings per share is expected to be resilient across market cycles, driven by a more balanced mix of spread, fee and underwriting margin income. The combined company expects to see an adjusted return on equity of more than 15%4 by the end of 2027. Realizes Meaningful Synergies. The transaction is expected to deliver various synergies, including revenue, expense, capital and tax synergies. The combined company expects more than $500 million of run-rate expense synergies by the end of 2028, primarily from the consolidation of functions, information technology systems and vendor partners.

Corebridge Financial, Inc. (NYSE: CRBG) and Equitable Holdings, Inc. (NYSE: EQH) today announced that they have entered into a definitive... Read More