Dispositions - Dispositions

12 Months Ended

Dec. 31, 2020

3. Acquisition and Dispositions

Acquisition

Acquisition of Versant Health

On December 30, 2020, the Company completed its acquisition of all of the issued and outstanding capital stock of Versant Health, Inc. (“Versant Health”), a managed vision care company, for $1.8 billion in an all-cash transaction. Versant Health owns the well-established marketplace brands, Davis Vision and Superior Vision.

Of the purchase price, $323 million and $95 million was allocated to the fair value of tangible assets acquired and liabilities assumed, respectively, at the acquisition date. The tangible assets primarily included $189 million of cash.

Additionally, $890 million was allocated to goodwill, $790 million was allocated to VOCRA, and $115 million was allocated to other intangibles. The goodwill recorded includes the certain expected synergies, assembled workforce and other benefits that management believes will result from combining the operations of Versant Health with the operations of MetLife, including strengthening and differentiating the Company’s vision benefit offering, reported in the U.S. segment, with one of the industry’s broadest networks of providers and plan options. The value of VOCRA, included in other assets, reflects the estimated fair value of the expected future profits associated with Versant Health’s customer relationships acquired. VOCRA will be amortized over the assets’ useful lives ranging from nine to 15 years.

The allocated purchase price also included deferred tax liabilities of $217 million, which are attributable to the intangible assets and liabilities, excluding goodwill, established at the acquisition date. No portion of goodwill is expected to be deductible for tax purposes.

The valuation of the assets acquired and liabilities assumed is preliminary and subject to revision as more detailed analyses are completed. If additional information about the estimated fair value of assets acquired and liabilities assumed becomes available, the Company may further revise the preliminary purchase price allocation as soon as practicable, but no later than one year from the acquisition date.

Total revenue of Versant Health represented less than 2% of pro forma total revenue of MetLife for each of the years ended December 31, 2020, 2019 and 2018 when evaluated as though the acquisition had occurred at the beginning of the earliest period presented.

Dispositions

Pending Disposition of Metropolitan Property and Casualty Insurance Company

In December 2020, the Company entered into a definitive agreement to sell its wholly-owned subsidiary, Metropolitan Property and Casualty Insurance Company and certain of its wholly-owned subsidiaries (collectively, “MetLife P&C”) to Farmers Group, Inc. for $3.9 billion in cash. In addition, the Company and the Farmers Exchanges have established a 10-year strategic partnership through which the Farmers Insurance Group will offer its personal line products on MetLife’s U.S. Group Benefits platform which will commence when the transaction closes. MetLife P&C results of operations are reported in the U.S. segment adjusted earnings through December 31, 2020. The transaction is expected to close in the second quarter of 2021 and is subject to regulatory approvals and satisfaction of other closing conditions.

The pending disposition meets the criteria for held-for-sale accounting but does not meet the criteria to be classified as discontinued operations. As a result, the related assets and liabilities are included in the separate held-for-sale line items of the asset and liability sections of the consolidated balance sheet. The following table summarizes the assets and liabilities held-for-sale at December 31, 2020:


	December 31, 2020
	(In millions)
Assets:
Fixed maturity securities available-for-sale	$	4,096
Equity securities	57
Mortgage loans	355
Other invested assets	29
Total investments	4,537
Cash and cash equivalents	765
Accrued investment income	38
Premiums, reinsurance and other receivables	1,411
Deferred policy acquisition costs	196
Goodwill	328
Other assets	143
Total assets held-for-sale	$	7,418

Liabilities:
Future policy benefits	$	3,506
Other policy-related balances	33
Payables for collateral under securities loaned and other transactions	862
Other liabilities	249
Total liabilities held-for-sale	$	4,650

MetLife P&C income (loss) before provision for income tax as reflected in the consolidated statement of operations was $399 million, $291 million and $367 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Disposition of Joint-stock Company MetLife Insurance Company

In December 2020, the Company entered into an agreement to sell its wholly-owned Russian subsidiary, the Joint-stock Company MetLife Insurance Company (“MetLife Russia”). In connection with the pending sale, a loss of $133 million, net of income tax, was recorded for the year ended December 31, 2020 and is reflected in net investment gains (losses). At December 31, 2020, MetLife Russia represented $382 million of total assets in the EMEA segment. MetLife Russia results of operations are reported in the EMEA segment adjusted earnings through December 31, 2020. In January 2021, the Company completed the sale of MetLife Russia.

Disposition of MetLife Seguros de Retiro S.A.

In October 2020, the Company sold one of its wholly-owned Argentinian subsidiaries, MetLife Seguros de Retiro S.A. (“MetLife Seguros de Retiro”). In connection with the sale, a loss of $162 million, net of income tax, was recorded for the year ended December 31, 2020. This loss was comprised of a $130 million pre-tax loss, which was reflected in net investment gains (losses). Additionally, the $162 million loss included a $32 million net tax charge, which was recorded in the provision for income tax expense (benefit) and included previously deferred tax items and losses which are not recognized for tax purposes. At December 31, 2019, MetLife Seguros de Retiro represented $237 million of total assets in the Latin America segment. MetLife Seguros de Retiro’s results of operations were reported in the Latin America segment adjusted earnings through June 30, 2020. See Note 2 for information on accounting for divested businesses.

Disposition of MetLife Limited and Metropolitan Life Insurance Company of Hong Kong Limited

In June 2019, the Company entered into a definitive agreement to sell its two wholly-owned subsidiaries, MetLife Limited and Metropolitan Life Insurance Company of Hong Kong Limited (collectively, “MetLife Hong Kong”). As a result of the agreement, a loss of $140 million, net of income tax, was recorded for the year ended December 31, 2019. This loss was comprised of a $100 million pre-tax loss, which was reflected in net investment gains (losses) and included allocated goodwill of $71 million. Additionally, the $140 million loss included a $40 million net tax charge, which was recorded in the provision for income tax expense (benefit) and included previously deferred tax items and losses which are not recognized for tax purposes. At December 31, 2019, MetLife Hong Kong represented $2.9 billion of total assets in the Asia segment. MetLife Hong Kong’s results of operations were reported in the Asia segment adjusted earnings through June 30, 2019. See Note 2 for information on accounting for divested businesses. In June 2020, the Company completed the sale and recorded a gain of $11 million, net of income tax, for the year ended December 31, 2020, which resulted in a total loss on the sale of $129 million, net of income tax.

Separation of Brighthouse

On August 4, 2017, MetLife, Inc. completed the separation of Brighthouse Financial, Inc. and its subsidiaries (“Brighthouse”) through a distribution of 96,776,670 shares of Brighthouse Financial, Inc. common stock outstanding, representing approximately 80.8% of those shares, to the MetLife, Inc. common shareholders (the “Separation”). MetLife, Inc. retained the remaining outstanding shares of Brighthouse Financial, Inc. common stock and recognized its investment in Brighthouse Financial, Inc. common stock based on the NASDAQ reported market price. In June 2018, the Company sold Brighthouse Financial, Inc. common stock (“FVO Brighthouse Common Stock”) in exchange for $944 million aggregate principal amount of MetLife, Inc. senior notes, which MetLife, Inc. canceled. The Company recorded $327 million of mark-to-market and disposition losses on the FVO Brighthouse Common Stock to net investment gains (losses) for the year ended December 31, 2018. At December 31, 2018, the Company no longer held any shares of Brighthouse Financial, Inc. for its own account; however, certain insurance company separate accounts managed by the Company held shares of Brighthouse Financial, Inc. See Note 13 for further information on this transaction.