Fidelity National Financial restructures business into two companies
27 April 2006 | 6405 views | 0
Fidelity National Financial (FNF) is embarking on a restructuring plan that will see the group split into two separate companies.
FNF operates as a holding company, with controlling stakes in fintech services firm Fidelity National Information Services (FIS) and insurer Fidelity National Title (FNT).
FNF's restructuring plan entails eliminating the holding company and involves a number of transactions that will result in the group combining the three publicly-traded companies into two units.
Under the complex arrangement, FNF will begin by transferring its specialty insurance business and some other assets to FNT in exchange for stock and spin the subsidiary off to shareholders as a public company.
FNF will then spin off its ownership stake in FNT to its shareholders in a tax-free distribution, leaving its ownership in FIS as its only asset.
FIS will then merge with FNF and issue FIS stock in a tax-free transaction, making the FIS business completely independent.
Finally, FNT will be renamed Fidelity National Financial (FNF).
Under the restructuring, current FNF chairman and CEO William Foley will assume the same positions in the new FNF unit. Additionally, he will become executive chairman of FIS, with Lee Kennedy continuing as CEO of FIS.
Fidelity National Financial also reported a 76% faill first-quarter earnings as a result of a one-time gain a year ago and increased operating expenses.