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MetLife in $11.5 billion deal for Citigroup insurance unit

MetLife has finalized an agreement to purchase Travelers Life Annuity, the insurance division of US banking giant Citigroup. The deal, which will see Metlife acquire most of Citigroup's international insurance business, has been valued at $11.5 billion.

While the agreement is expected to make MetLife the largest individual life insurer in North America, it is also a significant strategic move by Citigroup. Having previously looked to acquire assets that would enable it to provide all financial services, the company now appears intent on a degree of specialization.

Citigroup had already spun off Travelers Property Casualty and now has sold Travelers Life Annuity having only acquired the Travelers insurance company in 1998. According to Citigroup the businesses being acquired by MetLife achieved total revenues of $5.2 billion and profits of $901 million in 2004.

Also included in the deal is a ten year agreement for MetLife to make its products available through certain Citigroup distribution channels.

Metlife will pay Citigroup up to $3 billion in stock with the remainder paid in cash. The transaction is expected to close in the summer.