LONDON, June 18 (Reuters) - Prudential has sold a minority stake in its U.S. business, Jackson, to Apollo Global-backed Athene Holding for $500 million, the insurer said on Thursday, in the first phase of its plan to exit the U.S. insurance market. The London-listed, Asia-focused insurance firm, which is also regulated in Hong Kong has been looking for ways to offload the U.S. annuity provider and said it would continue to evaluate other options for the part of Jackson it still owned, including a minority initial public offering.
The end goal was to create an independent U.S. business, Prudential said, adding that the Athene investment was expected to close in July.
In addition, Prudential said Athene - which counts Leon Black’s Apollo Global Management as its biggest shareholder- would fully reinsure $27.6 billion of Jackson’s in-force fixed and fixed indexed annuity portfolio from June 1.
The combined effects of investment and reinsurance transactions are expected to raise Jackson’s risk-based capital cover ratio by 80 percentage points, Prudential said. (Reporting By Sinead Cruise, editing by Huw Jones)