Truist selling stake in insurance brokerage business in deal valued at $15.5 billion [The Charlotte Observer]

Charlotte Observer (NC)

Truist Financial Corp. is selling its stake in Truist Insurance Holdings, a subsidiary of Truist and the fifth largest insurance brokerage in the U.S., for $15.5 billion, the Charlotte-based bank said Tuesday.

Truist Insurance Holdings’ sale is expected to provide $10.1 billion in cash for reinvestment, according to the bank. The sale — expected to close in the second quarter of this year — is to an investor group led by private equity firms Stone Point Capital and Clayton, Dubilier & Rice. Mubadala Investment Co. and other co-investors are also part of the investment.

The agreement comes five months after Truist announced a $750 million companywide cost-cutting plan. The plan included “sizable” layoffs resulting in about $300 million in savings, according to Truist. The bank has not detailed how many layoffs are coming.

The brokerage deal will strengthen Truist’s balance sheet and create flexibility for Truist investments, Truist Chairman and CEO Bill Rogers said in a statement.

The sale is subject to regulatory reviews and approvals. Truist’s Board of Directors unanimously approved the agreement.

About the Truist deal

Truist Insurance Holdings with more than 200 offices and about 10,000 employees, will remain headquartered in Charlotte, according to Truist. The sale is not expected to have any local impact.

The partnership with Stone Point and CD&R is critical to remaining competitive in a rapidly changing industry, TIH Chairman and CEO John Howards said in a statement.

Stone Point is an alternative investment firm based in Greenwich, Connecticut, with more than $50 billion of assets under management. Founded in 1978, CD&R is privately owned by its partners and has offices in New York and London.

In 2019, Atlanta-based SunTrust and Winston-Salem-based BB&T merged in a $66 billion deal to form Truist, and chose Charlotte for the new bank’s headquarters city.