Finance and leasing firm Orix Corp. is in talks to buy Hartford Financial Services Group Inc.'s unit in Japan, according to sources.
Nothing has been decided on the purchase, Tokyo-based Orix said in a statement filed with the Tokyo Stock Exchange. The Connecticut-based insurer, which has been focusing on property-casualty coverage, is near a deal to sell Japan operations to Orix, two sources familiar with the talks said Friday.
The transaction will include retirement products known as variable annuities, said the sources, who asked not to be identified because discussions are private. Orix will pay about $875 million, according to the Nikkei newspaper, which reported the talks over the weekend.
Hartford Chief Executive Officer Liam McGee, 59, has sold a U.S. unit to Prudential Financial Inc. and added hedges to guard against currency fluctuations and stock market declines as he seeks to limit liabilities tied to life and retirement contracts issued in prior years.
He announced a deal last year to sell a U.K. variable annuity unit to Warren Buffett's Berkshire Hathaway Inc.
"We continue to look at ways to further accelerate the runoff of the legacy annuity block and to permanently eliminate these exposures," Shannon Lapierre, a spokeswoman for Hartford, said Friday in an email. "A transaction is one of the options we would evaluate."
Lapierre said any offer will be evaluated based on the likelihood of regulators' support and the prospect that a deal will help release capital. She declined to comment on Orix, citing company policy about market speculation.