Phoenix Group has formally made an offer of around £3.2 billion to Swiss Re for its shareholding in ReAssure Group. If the deal goes through Phoenix will add about £84 billion in assets, or about 4.1 million policies. Phoenix also aims to make multi-million savings through consolidation, smoother admin, integration etc.
Commenting on the Acquisition, the Group’s CEO, Clive Bannister, said:
“This is a highly attractive acquisition for Phoenix that follows our growth strategy and delivers value to our shareholders. The acquisition will contribute £7 billion of incremental cash generation and give us the opportunity to capture significant cost and capital synergies. The purchase price, at 91% of ReAssure’s pro-forma Solvency II Own Funds, is attractive; as is the efficient financing structure. Together, this enables us to maintain our balance sheet strength.
The deal confirms Phoenix’s position as Europe’s largest life and pensions consolidator with £329 billion of assets under administration and 14.1 million policies and will give us an enhanced platform to pursue further growth opportunities, including Bulk Purchase Annuities. We also welcome Swiss Re and MS&AD as significant new shareholders and see their investment as a recognition of the many benefits that this combination can bring.”
Commenting on the Acquisition, Christian Mumenthaler, Group CEO, Swiss Re said:
“We are pleased to have found a strong buyer for ReAssure Group plc, delivering on our stated objective of deconsolidating this business. Phoenix is a natural acquirer of ReAssure and has a proven track record of delivering value to both shareholders and customers. We look forward to working with Phoenix and supporting them in achieving their vision of being Europe’s Leading Life Consolidator.”
Commenting on the Acquisition, Keith Skeoch, CEO, Standard Life Aberdeen, said:
“Today’s announcement by Phoenix illustrates the substantial consolidation opportunities that exist within the UK and European insurance sectors which was a key factor in our making our strategic investment in Phoenix.
As a leading provider of investment solutions to both Phoenix and ReAssure we will be working with Phoenix to understand the additional opportunities that the proposed acquisition creates for Standard Life Aberdeen.”
Transaction Timetable
Due to its size, the Acquisition is subject to the requirements of a Class 1 transaction, under the Listing Rules, including being conditional upon the approval of Phoenix’s shareholders. The issue of Phoenix’s ordinary shares as consideration (the “Consideration Shares”) will require a prospectus in order to admit the Consideration Shares to the premium listing segment of the Official List. In addition, the Acquisition is subject to the satisfaction of other conditions including receipt of regulatory and anti-trust approvals.
Phoenix currently expects to publish a combined shareholder circular and prospectus (the “Circular and Prospectus”) for the Acquisition in the first quarter of 2020. Completion of the Acquisition is targeted for mid-2020.
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