Aetna Inc. (AET) agreed to buy Genworth Financial Inc.'s (GNW)
Medicare-supplement business for about $290 million, as Genworth
continues to narrow its focus on retirement and protection
products.
"This sale represents another step in executing our strategy to
concentrate on leadership positions within our businesses," said
Genworth Chairman and Chief Executive Michael D. Fraizer.
Medicare supplement products cover deductibles, co-pays and
other expenses not covered under Medicare Parts A and B. The deal
includes Continental Life Insurance Co. of Brentwood, Tenn., and
its American Continental Insurance Co. unit. Aetna will also
reinsure certain related blocks of in-force business.
"This acquisition is in keeping with Aetna's plan to broaden its
product portfolio and add new revenue streams, and address the
increasing needs of the senior population," Aetna Chief Financial
Officer Joseph M. Zubretsky said.
The health-insurange giant said the transaction, expected to
close during the fourth quarter, will be neutral to its 2012
earnings.
Genworth expects to record a $35 million gain on the sale. Last
month, the financial-security company reported its first-quarter
profit fell 54%, though revenue rose 6.1%.
Genworth shares were trading 1.3% higher at $10.23 premarket.
Aetna shares closed at $42.86 Friday and were inactive
premarket.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com