Insurer Lincoln National to Acquire Jefferson-Pilot

Lincoln National Corp. said Monday that it would acquire rival Jefferson-Pilot Corp. for about $7.5 billion in cash and stock, as the two century-old companies create one of the largest publicly traded life insurance companies in the U.S.

The buyer, which would retain the Lincoln National and Lincoln Financial Group names, would be the nation’s largest seller of universal life insurance products and a leader in group disability insurance and retirement plan assets, the companies said.

The deal is expected to be completed in the first quarter after shareholder and regulatory approval.

Executives predict annual savings of about $180 million after the two companies were combined. Lincoln National has annual sales of $5.4 billion, while Jefferson-Pilot has annual revenue of $4.1 billion.

“Given the challenging operating environment for life insurers, we believe this merger makes perfect sense,” said analyst Tamara Kravec, who follows both companies for Banc of America Securities. “The products and distribution channels of both companies are complementary and there is little overlap.”

The deal would combine Lincoln’s strengths in life and annuities products with Jefferson-Pilot’s sizable presence in fixed and variable universal life and fixed annuities, including equity-indexed annuities and other insurance, the companies said.

Jon Boscia, Lincoln National’s chief executive and chairman, would hold the same posts at the combined company.

Shares of Greensboro, N.C.-based Jefferson-Pilot rose $3.02, or 6%, to $53.81. Philadelphia-based Lincoln National lost $1.54, or 3%, to $49.19.

Although job reductions weren’t specifically discussed Monday, the companies said they planned to share services and consolidate some functions to save money.