Cigna Corp. agreed to sell its retirement and investment services business to Prudential Financial Inc. for $2.1 billion in cash, allowing Cigna to refocus on its core health insurance business, both companies said Monday.
The deal would free Cigna, based in Philadelphia, of a unit that has struggled in the last year to overcome the prolonged stock market swoon. The subsidiary, which boasts $56 billion in assets under management, earned $58 million during the recently completed third quarter, up 2% from a year ago.
Cigna's unit sale would exclude its corporate life insurance unit and its investment advisory operation, TimesSquare Capital Management Inc. Proceeds would be used to support its ratings, reduce debt and buy back shares, the company said.
At Prudential, retirement business assets would rise to nearly $120 billion and by 2 million participants, while adding Cigna's defined benefit and defined contribution products to its line.
The deal is expected to close in the first half of 2004, Newark, N.J.-based Prudential said.
Shares of Prudential fell 30 cents to $36.60. Cigna shares fell $1.03 to $55, also on the New York Stock Exchange. The news was released after market close.