Old Mutual PLC, which is quickly assembling a diverse U.S. product line, is set to add a strong life insurance component and, more importantly, crucial U.S. distribution capacity to its portfolio here with an agreement to buy Fidelity and Guaranty Life Insurance Co.

Old Mutual, an insurance and financial services giant based both in London and Johannesburg, announced an agreement Thursday to pay $300 million in stock and $335 million in cash to buy F&G of Baltimore from St. Paul Cos., a Minnesota commercial property-casualty insurer. Old Mutual also would get F&G’s New York subsidiary, Thomas Jefferson Life, in the deal.

Jim Sutcliffe, chief executive of Old Mutual, said the deal, which is expected to close in the next three or four months, would further its U.S. strategy, mainly because F&G has a strong network of independent agents selling its products.

In addition, Old Mutual’s experience at distributing insurance products through its Nedcor Group Ltd., one of the largest banking companies in South Africa, would help F&G increase its bank sales in the United States, Mr. Sutcliffe said. “We are very familiar with banking and insurance, and we are keen to share that experience.”

The deal is Old Mutual’s third in the United States in the past year. Last month it announced plans to buy Unified Life Insurance, a tiny Houston life and annuity company, for $25 million, and in September it bought United Asset Management Corp. of Boston.

F&G’s life insurance and annuity business would fit well with Old Mutual’s core businesses of life insurance, asset management, and banking, and it would benefit from working with other Old Mutual units, especially those in the United States, Mr. Sutcliffe said.

Much of Old Mutual’s business is in South Africa, but the company has been diversifying through U.S. and U.K. acquisitions to dilute its South African concentration, he said.

F&G Life sells life insurance, annuities and structured settlements, and last year it had $5 billion of assets under management and generated $1.1 billion of revenues. It began selling its life and annuity products through banks in the fourth quarter but does not sell structured settlements through this channel.

Harry N. Stout, president of F&G Life, said that becoming part of Old Mutual would give F&G a parent with substantial experience in life insurance and asset management — which St. Paul does not have at all. Though St. Paul has owned F&G Life for three years, it has treated the insurer mainly as an investment, not managing it actively, he said.

F&G’s biggest gain from the deal would be association with “a very large global financial services organization,” Mr. Stout said, “and I think today, especially in the U.S., you really need to be part of a global financial services organization.”

Guy Barker, chief executive of Old Mutual’s U.S. life insurance operations, said he is looking for ways to have all its units work together. Old Mutual would not shy away from other life insurance deals, he said, “but this is our big, sensible play. We want to consolidate that before we go out and do anything else.”

However, analysts said they doubt that the company would be able to capitalize on the potential opportunities immediately.

Nic Clarke, an analyst at Charles Stanley & Co. in London, said the experience European insurance and financial services companies have in distributing through banks can help the U.S. insurers they acquire.

For example, if Prudential PLC’s bid to buy American General had worked out, the expertise the British company gained through its Internet banking operations “would have been a good sort of transfer of knowledge to American General,” he said.

Old Mutual could bring its own expertise to F&G, Mr. Clarke said. However, the United States “is a tough market to get into,” and even if this deal goes through, Old Mutual’s U.S. operations “will be small-scale compared to their competitors,” he warned.

Johnny Lambridis, an analyst at ING Baring in Johannesburg, said the key difference between the F&G Life deal and Old Mutual’s purchase of Unified Asset Management “is that when they bought UAM they were buying a massive business with scale.”

Because F&G is “very much a niche, fixed-interest life company, I can’t see them becoming as serious player in the U.S. market anytime soon,” Mr. Lambridis said. The deal would be “a stepping stone” in the United States for Old Mutual, he said.

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