Truist in talks to sell insurance business for $10 billion – Semafor

(Reuters) -Truist Financial is in talks to sell its insurance brokerage unit to private equity firm Stone Point for about $10 billion, news website Semafor reported on Monday, citing people familiar with the matter.

The deal talks highlight the lingering effects of the banking crisis earlier this year that continues to redraw the industry landscape.

A sweeping overhaul of capital rules proposed by U.S. regulators in the aftermath of the crisis is prompting banks to prioritize their core businesses and spurring a retreat from secondary ventures.

Truist’s shares climbed 7.3% to $29.42 on Tuesday, set for their biggest intraday percentage gain since early May if current levels hold.

Stone Point bought a 20% stake in the unit, known as Truist Insurance Holdings, in April in a deal that valued the business at $14.75 billion.

When the transaction was unveiled in February, before the industry turmoil, Truist said it would continue to own 80% of the unit.

The talks are ongoing, according to the Semafor report, which added that a deal may hinge on Stone Point’s ability to scrounge up enough debt.

While the market for mergers and acquisitions is slowly reviving, buyout loans continue to be a concern as lenders wait for stronger signs of a rebound in dealmaking before financing corporate purchases.

Truist Financial declined to comment on the Semafor report, while Truist Insurance and Stone Point did not respond to Reuters requests for comment.

(Reporting by Shivani Tanna and Niket Nishant in Bengaluru; Editing by Maju Samuel, Shounak Dasgupta and Sriraj Kalluvila)