Proactive Investors - Legal & General Group PLC (LON:LGEN) has announced the sale of its UK housebuilding subsidiary CALA Group after months of speculation.
Cala is being sold for an enterprise value of £1.35 billion to an entity controlled by investment firms Sixth Street Partners and Patron Capital, with the FTSE 100-listed life insurer to receive £1.16 billion in cash.
Patron was previously a part owner of Cala with L&G, before selling its 52.1% stake for £315 million in 2018 to the London-listed group.
Speculation over the sale of the company first emerged in March, when it was suggested Cala could be sold for £1 billion.
“A potential sale would not be a surprise”, given L&G’s attempts to streamline the company, analysts said at the time.
Commenting on the announcement today, L&G’s chief executive António Simões said: "This transaction demonstrates continued momentum in executing our strategy, simplifying our portfolio to enable a sharper focus on our core, synergistic businesses.
“Cala has been an important part of L&G for over a decade, with profits increasing tenfold since our initial investment in 2013.
“The sale announced today will provide capital to deliver our strategic goals of sustainable growth alongside enhanced returns for shareholders.”
The deal is expected to close by the end of the year.