US-Based Firm Acquires ALICO

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The New Orleans (USA) based PanAmerican Life Insturance Company (PALIG) has announced an agreement this week to acquire selected assets and businesses from MetLife, including the latter's American Life and General Insurance Company (ALICO) operations in Costa Rica and Panama.

Other units to be taken over by PALIG cover Trinidad & Tobago, the Barbados, Cayman Islands, the majority of the Leeward and Windward Islands in the Caribbean.

Terms of the transaction were not made public but it is known that the acquisition greatly expands PALIG's presence in the Caribbean and Central America. The existing companies in Costa Rica and Panama are strong and the entire purchase represents $125 million in premiums last year and some $675 million in assets.

After closure, "PanAmerican Life Insturance Group will have will have more than $625 million in revenues, $2.8 billion in assets and and more than 1,300 employees," explained PALIG board chairman Jose S. Suquet, who is also CEO.

"The acquisition of MetLife businesses and the establishment of our new operation in Mexico expand our geographic footprint, give us greater diversification and economies of scale and reinforce the commitment our founders made 100 years ago to provide trusted financial security to customers in Latin America and the Caribbean," he added.

MetLife was one of the insurance companies that entered the Costa Rican market immediately after it was opened up to private firms, ending the monopoly enjoyed by the government-owned National Insturance Institute (INS). INS continues to be the dominant competitor in insurance.

Both MetLife and PALIG have received the proper internal approvals and the deal is expected to be closed in early 2012, but is subject to regulatory permits. In Costa Rica, this includes permission by the government insurance regulatory agency, SUGESE.

Morgan Stanley served as chief financial advisor to PALIG and their legal advisor was Debevoise & Plimpton LLP. Principal legal advisor to MetLife was Dewey & Leboeuf LLP.