Shares of Cigna rose 2.8% to $199.
The acquisition is expected to close in the third quarter of 2020, the companies said in a statement.
Cigna, which operates a call center near Bethlehem, Pa., expects to reap about $5.3 billion of net after-tax proceeds from the transaction. It plans to use the proceeds to buy back shares and pay down debt in 2020.
Cigna’s board raised the company’s share repurchase authority by $3 billion to an aggregate $4 billion.
The Bloomfield, Conn., insurer said it expected the transaction to be neutral to earnings per share in 2020 and add modestly to EPS in 2021.
Last December, Cigna closed its $67 billion acquisition of pharmacy-benefits manager Express Scripts.
The company's debt load increased to more than $40 billion after the transaction and Cigna said that it continued to expect to meet its deleveraging commitments made after it acquired Express Scripts.
The group life and disability insurance business will operate within New York Life’s portfolio of strategic businesses. Cigna employees and employees who primarily support the acquired businesses will transfer to New York Life.
“This transaction increases the value we can deliver to our policy owners, strengthens our well-defined business model, and adds millions of customers to the New York Life family,” New York Life Chairman and CEO Ted Mathas said in a statement.
“Cigna’s group life and disability business enhances our portfolio of strategic businesses and is led by an experienced management team and high-quality workforce. ..."