Voya Financial, Inc. (NYSE: VOYA) (“Voya”), announced today that it has entered into a memorandum of understanding (“MOU”) relating to AllianzGI’s transfer of selected investment teams and assets comprising the substantial majority of its U.S. business (“AGI U.S.”) to Voya IM, Voya’s asset management business. The planned strategic partnership is being disclosed in anticipation of a definitive purchase agreement being finalized in the coming weeks, consistent with the timetable announced today for AllianzGI’s plans to divest AGI U.S.
Under the proposed transaction, Voya IM will acquire AGI U.S.’s highly complementary and internationally established equity and fixed income investment teams, select client service and sales professionals, and approximately $120 billion of assets under management (AUM), which consist of income and growth, fundamental equity, and private placement assets. On a pro forma basis and based on AUM as of March 31, 2022, Voya IM’s AUM would increase to approximately $370 billion.
The terms of the MOU include a long-term strategic-distribution partnership whereby AllianzGI would distribute Voya IM’s investment strategies outside the U.S. This arrangement will allow Voya IM to benefit from AllianzGI’s diverse, global reach, and enable Voya IM to offer its attractive U.S. asset-based investment strategies to an even larger client base.
As consideration for the acquisition, AllianzGI would receive an up to 24% stake in Voya IM. The planned acquisition will require no external financing or use of Voya’s excess capital.
“We believe this to be a unique opportunity to acquire highly complementary investment management teams and assets, at scale, while preserving our strong excess capital position for additional value-creation actions, such as continued share repurchases and dividends along with further investments in our businesses,” said Rodney O. Martin, Jr., chairman and chief executive officer, Voya Financial, Inc. “We will also continue to execute on the organic growth plans that we shared at our Investor Day in November 2021 so that we can build upon our already strong commercial momentum.”
“We are very excited about this potential transaction and all of the benefits that it would enable Voya IM to bring to our clients, our distribution partners, and our talented investment professionals and employees,” said Christine Hurtsellers, chief executive officer, Voya IM. “We have long identified increased scale and broader international distribution as attractive growth priorities, and this transaction would help us achieve those objectives while complementing our continued focus on private strategies and alternative investments, particularly given the strong global demand for these strategies that we are seeing from institutional investors and advisors.”
Voya IM’s management and leadership team, including Hurtsellers and Voya IM’s chief investment officers, would continue in their roles leading Voya IM, including the newly incorporated investment teams that would join from AGI U.S. This will ensure continuity of Voya IM’s investment approach and strategy, which includes leveraging Voya’s award-winning, ethical culture, as well as the firm’s investments in data, analytics and technology to meet the increasing needs of its clients.
Although the transaction will be structured as an acquisition only of selected investment teams and assets from AGI U.S., the terms of the proposed transaction will provide robust protection for Voya Financial against any and all legal or regulatory liabilities related to AGI’s other business activities, including all activities in the United States prior to the closing of the contemplated transaction.
Further details of the transaction will be announced upon execution of definitive agreements. Voya and Allianz are working expeditiously to finalize the terms of the transaction and are targeting execution of a definitive asset purchase agreement and distribution agreement within the next several weeks.
Goldman Sachs & Co. LLC is serving as financial advisor, and Cleary Gottlieb Steen & Hamilton LLP is serving as legal counsel to Voya in connection with this transaction.
The execution and ultimate completion of a definitive transaction cannot be assured, and is subject to conditions, including regulatory reviews and approvals.