MetLife CFO: Alico Set for Overseas Growth
NEW YORK(
) --
MetLife's
(MET) - Get Report
integration of American Life Insurance Company (Alico) will take two-and-a-half years and reposition the unit for the Japanese market, said William Wheeler, MetLife CFO a phone interview with
TheStreet.
The insurer completed its acquisition of ALICO from
American International Group
(MET) - Get Report
(AIG) for $16.2 billion.
Wheeler said the integration of Alico will be run by Bill Toppeta, who is in charge of international operations, and post-tax integration expenses will be around $500 million dollars.
MetLife CFO William Wheeler |
"Half of that will get spent next year. It is a pretty big amount. It is not only spending money on technology, but we are also going to spend a lot of money on repositioning the company, especially in Japan," Wheeler said.
Wheeler added a large part of the integration will also be hiring employees to their finance staffs globally and installing new general ledgers in each region as well as actuarial systems. Hiring will be mostly in Japan and Europe, but Wheeler could not specify how many employees the insurer was looking to recruit.
"We have to augment the current staffs in some of these regions. We have to hire people with US GAAP expertise and train some of the existing people," Wheeler said. "The financial integration will take roughly a year to 18 months to complete."
Wheeler says next year shareholders should expect earnings accretion to be 40 cents to 45 cents per share. He added that there is upward pressure on that number due to declining interest rates and the valuation of the dollar and that it would improve return on equity by 100-basis points.
"It changes the long term growth outlook for MetLife because now over 40% of our earnings will come from our international businesses, most of which are growing faster than the U.S. is," Wheeler said.
Since MetLife has historically been U.S.-focused, Wheeler says that the company will also be transitioning culturally.
"I think we will have to change. How we are managed is going to have to change. Because of that we are going to have to become a little bit more decentralized and I think our mindset will have to change. They talk about having a global mindset and that is something at MetLife that we think about a lot now that we are thinking hard about how we want to manage these international operations," Wheeler explained.
Earlier Monday Fitch Ratings upgraded the ratings on the transition to 'AA-' from 'A+'.
--Written by Maria Woehr in New York.
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