Insurer Lincoln National Corp., which has operations in Hartford, is selling its asset management unit to Australian financial services firm Macquarie Group for $428 million in cash.
Lincoln National is selling Delaware Management Holdings Inc. to the Sydney-based financial firm in a deal that is expected to close at the end of the year.
Lincoln National said it will use the money from the sale for general corporate purposes, which could include paying back some of the government bailout funds it received earlier in the year.
The insurance firm received $950 million in early July as part of the government’s $700 billion Troubled Asset Relief Program that was set up to provide support for the financial services sector during the credit crisis.
Lincoln National was one of six large insurers to be granted access to the program in May. The Philadelphia-based firm was approved to receive up to $2.5 billion, though it only accepted the $950 million.
Lincoln traded late morning up 33 cents, or 1.4 percent, at $23.22.
Delaware Management had more than $125 billion in assets under management at the end of June. Once the deal is closed, Macquarie’s combined operations will manage more than $300 billion in assets, Macquarie said in a statement.
Macquarie said it acquired Delaware Management as part of its plans to develop global asset management operations.
Lincoln National, which markets itself under the name Lincoln Financial Group, said the sale allows the firm to focus on its insurance and retirement services operations, which are its primary operations.
The pair of companies will continue to have a relationship after the sale. Delaware Management will continue to manage Lincoln National’s general account insurance assets as part of a long-term contract.
Delaware Management will remain based in Philadelphia. Its president, Patrick Coyne, will continue to run the company. He will report to Ben Bruck, an executive director of Macquarie Funds Group. (AP)
