The announcement by Massachusetts Mutual Life
Insurance Company (MassMutual) that it has entered into a
definitive agreement with The Hartford to purchase its retirement
plans business has been described as “credit positive” for both
companies by Moody’s Investors Service.

MassMutual said the purchase price is $400m,
subject to adjustment at closing. The transaction, which is subject
to regulatory and other approvals, is expected to close by the end
of 2012.

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MassMutual said that under the leadership of
Elaine Sarsynski, executive vice president and head of MassMutual’s
Retirement Services Division, and chairman and CEO of MassMutual
International LLC, a plan will be implemented to ensure an orderly
integration of the acquisition over the coming year.

Once the transaction is completed, the
combined retirement businesses are projected to have approximately
$120bn in assets under management and 3m participants.

Roger Crandall, chairman, president and CEO of
MassMutual, said MassMutual’s retirement services division is an
important contributor to MassMutual’s overall profitability and
success.

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Crandall said: “This transaction enables us to
accelerate growth into new sectors, add complementary distribution
capabilities, and nearly double the number of retirement plan
participants we serve.”

Analysing the implications of the acquisition,
Moody’s said for Hartford, the sale is credit positive because it
represents progress in its restructuring efforts, which include the
divestitures and shutdown of most of the company’s life insurance
operations to focus on its property & casualty businesses.

It added that MassMutual will supplement and
complement its existing 401k business, enabling it to gain scale
and expense efficiencies, as well as an opportunity to penetrate
new distribution channels.

The ratings agency said the acquisition price
will have a minimal effect on liquidity and capital adequacy.