In announcing its agreement to acquire Stewart Information Services Corp., Fidelity National Financial, Inc. (FNF) said it had identified an estimated $135 million in operational cost synergies.
In corporate America, “synergies” almost always translates to job cuts, especially for the company being acquired. FNF Chairman William P. Foley, II said those “synergies” center around corporate activities or areas where there’s duplication – likely some title plants. He also said those synergies would be implemented before or upon the deals expected close in the first or second quarter of 2019.
“What you will not see are cost synergies based upon closing of an operational facility that is complementary to the FNF family,” Foley said during a conference call with analysts, investors and journalists.
Foley said a “good part” of Stewart’s management would be retained, with cuts focused on the corporate side of the business including back offices and support staff. “Obviously, Fidelity already has a good part of that,” Foley said.
Foley also said FNF has a retention plan in place. “Part of the retention plan is paid at closing; and the second part of the retention plan is paid one year following closing,” Foley said. “So we are identifying a large number of employees that will participate in this retention plan.”
Demotech, Inc. President Joseph Petrelli said Stewart employees are not likely to see any change for a couple of years.
“If I’m 62 or older, I don’t worry about it,” Petrelli told The Title Report. “If I was hired by Stewart in 2018, maybe I’d be thinking about it, if I was the new person on the payroll. I think those evaluations are several years down the road. We’re looking at 2020 before anyone gets really squeezed.”