Blackstone’s $2.8 Billion Acquisition of Allstate Life Insurance Company


Willkie Farr & Gallagher LLP advised Allstate, while Debevoise & Plimpton LLP advised Blackstone in the transaction.

The Allstate Corporation (NYSE: ALL) has agreed to sell Allstate Life Insurance Company (ALIC) to entities managed by Blackstone for $2.8 billion. ALIC holds approximately 80% (or $23 billion) of Allstate’s life and annuity reserves and generated net income of $467 million in 2019 and a net loss of $23 million in the first nine months of 2020. The transaction is subject to regulatory approval with an expected closing in the second half of 2021.

Allstate will sell ALIC and certain subsidiaries, excluding Allstate Life Insurance Company of New York (ALNY), to entities managed by Blackstone for $2.8 billion, including a pre-closing dividend from ALIC of up to $400 million. All statutory earnings from March 31, 2020, to closing, will be retained by Allstate. The transaction will reduce Allstate’s GAAP reserves by $23 billion. Blackstone will enter into an asset management agreement for ALIC’s $28 billion of investments.

The Allstate Corporation (NYSE: ALL) protects people from life’s uncertainties with a wide array of protection for autos, homes, electronic devices and identity theft with more than 172 million policies in force. Products are available through a broad distribution network including Allstate agents, independent agents, major retailers, online and at the workplace.

Blackstone is one of the world’s leading investment firms, with $584 billion in assets under management, including investment vehicles focused on private equity, real estate, public debt and equity, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis.

J.P. Morgan Securities LLC, Ardea Partners LP and Lazard acted as financial advisers to Allstate. Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC acted as financial advisers to Blackstone.

The Debevoise team was led by Insurance M&A partner Marilyn Lion (Picture) and included partner Nicholas Potter, counsel Michael Devins and Andrew Jamieson and associates Sarah Hale, Matthew Parelman and Arianna Thompson, finance partner Sunil Savkar, counsel Kevin Grondahl and associate Hanson Yu, benefits partner Jonathan Lewis and associate Jeri Brown, tax partner Peter Schuur and associates Shanna Adler, Samuel Krawiecz and Lena Smith, intellectual property partner Jeffrey Cunard and associate Paisley Piasecki and capital markets partner Eric Juergens.

Involved fees earner: Jeffrey Cunard – Debevoise & Plimpton; Michael Devins – Debevoise & Plimpton; Kevin Grondahl – Debevoise & Plimpton; Sarah Hale – Debevoise & Plimpton; Andrew Jamieson – Debevoise & Plimpton; Eric Juergens – Debevoise & Plimpton; Samuel Krawiecz – Debevoise & Plimpton; Jonathan Lewis – Debevoise & Plimpton; Marilyn Lion – Debevoise & Plimpton; Matthew Parelman – Debevoise & Plimpton; Nicholas Potter – Debevoise & Plimpton; Sunil William Savkar – Debevoise & Plimpton; Peter Schuur – Debevoise & Plimpton; Lena Smith – Debevoise & Plimpton; Arianna Thompson – Debevoise & Plimpton;

Law Firms: Debevoise & Plimpton;

Clients: Blackstone;

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Author: Ambrogio Visconti