March 26 (Reuters) - U.S. insurers Equitable and Corebridge Financial ( CRBG ) said on Thursday they will merge in an all-stock deal that would create a $22 billion retirement, life insurance and asset management company.

The combined company will have more than $1.5 trillion in assets under management and administration and serve more than 12 million customers.

Insurers are seeking scale to stay competitive, diversify their business, and strengthen their position in expanding markets such as retirement and wealth.

"The combined company will benefit from a strong competitive position and accelerated growth across retirement, life and institutional markets, as well as asset and wealth management," Equitable CEO Mark Pearson said.

Each outstanding Corebridge share will be exchanged for one share of the new parent company, while each outstanding Equitable share will be exchanged for 1.55516 shares.

Corebridge's shares rose 2.4% premarket while Equitable was up 3.4%.

Corebridge, carved out of AIG in 2022, is one of the largest U.S. providers of retirement and insurance products. Equitable, which owns asset manager AllianceBernstein, provides retirement and protection strategies.

Equitable had a roughly $10.7 billion market capitalization as of last close, while Corebridge was valued at about $11.6 billion, according to LSEG.

SCALED PLATFORM

The deal brings together three franchises - Corebridge, Equitable, and AllianceBernstein - to create a diversified financial services company.

Over time, $100 billion of Corebridge's assets will be moved to AllianceBernstein, creating an almost $1 trillion asset manager.

The deal is expected to boost earnings by more than 10% by the end of 2028 after close, targeted for the end of 2026.

The combined entity will be headquartered in Houston and operate under the Equitable name. It is expected to generate more than $5 billion of operating earnings.

Corebridge CEO Marc Costantini will lead the combined company, while Equitable CEO Mark Pearson will serve as executive chair.

Corebridge shareholders will own about 51% of the combined company, while Equitable investors will hold roughly 49%.

The companies set a breakup fee of $475 million if the deal falls through.

Morgan Stanley advised Corebridge, while Goldman Sachs advised Equitable.

(Reporting by Prakhar Srivastava and Arasu Kannagi Basil in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila)