Corebridge Financial and Equitable Holdings agree to $22B merger

Financial services firms Corebridge Financial and Equitable Holdings have agreed to merge in an all-stock transaction valued at $22 billion, forming a diversified financial services group with significant scale across retirement, insurance and asset management.

The deal will see both companies combine under a new parent entity, which will operate under the Equitable name and brand.

Corebridge shareholders will hold a 51% stake in the combined company, while Equitable shareholders will own the remaining portion.

Shares of both firms rose around 2% on Thursday, reflecting investor optimism about the strategic rationale behind the merger.

Structure and leadership of the combined entity

Under the terms of the agreement, each Corebridge share will be exchanged for one share in the new parent company, while Equitable shareholders will receive 1.55516 shares for each existing share held.

Corebridge Chief Executive Marc Costantini will take on the role of CEO, while Equitable Chief Financial Officer Robin Raju will serve as CFO of the combined entity.

The transaction is expected to close by the end of the year, subject to regulatory approvals and shareholder consent.

Focus on scale and diversification

The companies said the merger is designed to create a leading player in retirement, life insurance, wealth management, and asset management by leveraging complementary strengths.

The combined group will oversee approximately $1.5 trillion in assets under management and administration, significantly expanding its market presence.

Corebridge, which was spun off from AIG in 2022, is a major provider of retirement and insurance products in the United States.

Equitable, meanwhile, offers retirement and protection solutions and owns asset manager AllianceBernstein.

The merger will bring together these three franchises, positioning the company as a diversified financial services provider with broader capabilities.

Cost savings and synergies in focus

The companies expect to generate $500 million in annual pre-tax expense synergies by 2028, representing around 10% of the combined expense base.

Robin Raju said a significant portion of these savings would come from eliminating redundancies across systems, service contracts, and workforce, while additional benefits are expected from capital and tax efficiencies.

Marc Costantini noted that the increased scale would help lower the cost of capital and improve competitiveness.

He added that the combined entity aims to achieve one of the lowest expense ratios in the industry, enabling greater investment in growth and talent acquisition.

Asset management expansion plans

As part of the integration strategy, the companies plan to transfer around $100 billion of Corebridge’s assets to AllianceBernstein over time.

This move is expected to create an asset manager with nearly $1 trillion in assets, strengthening the group’s position in the global investment landscape.

The companies also expect the transaction to deliver earnings accretion of more than 10% by 2028, supported by cost savings and revenue synergies.

The merger reflects a broader trend of consolidation in the financial services industry, as firms seek scale and diversification to navigate a complex economic environment marked by interest rate volatility and evolving customer needs.