Legal & General has struck a deal to sell its US protection business to Meiji Yasuda for £1.8 billion.

The London-listed life insurance and pensions firm saw shares jump higher in early trading on Friday as a result.

It said the Japanese life insurance firm plans to take a 5% stake in L&G as part of the move.

The deal is part of plans by L&G to streamline its operations, after its share price stuttered over the past three years.

The firms said they expect the deal to complete “towards the end of 2025” and that it is still subject to regulatory approvals.

L&G has said around £400 million will be used from its windfall to fund its US pension risk transfer (PRT) partnership with Meiji Yusada.

It added that it also expects to return around £1 billion to L&G shareholders.

Antonio Simoes, group chief executive of L&G, said: “This is a transformative transaction that brings significant strategic and financial benefits to the group and demonstrates our commitment to deliver on our strategy – sharpening our focus on core businesses, leveraging the synergies between them, and driving sustainable growth to enhance shareholder returns.

“This strategic partnership brings together two highly complementary global businesses, with a shared ambition for growth, and will enable us to capitalise on the large market opportunities in US PRT while driving scale and profitability in global asset management.”

Hideki Nagashima, president and group chief executive of Meiji Yasuda, said: “We are pleased to announce this landmark transaction, which will accelerate Meiji Yasuda’s international growth strategy – strengthening our position in the US life insurance market, deepening our long-standing partnership with L&G in asset management, and enabling access to the US PRT market.

“Our intention to acquire a 5% shareholding in L&G reflects our confidence in their leadership, strategy and long-term prospects.”

Shares in L&G were up 7.5% in early trading.

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