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Phoenix to buy UK closed-book arm from SwissRe for £3.25bn

ReAssure had previously planned a US$4.1bn flotation, but abandoned the plan in July after a weak response from institutional investors

Phoenix Group Holdings PLC -

The Phoenix Group Holdings (LON:PHNX) has sealed a £3.25bn cash-and-shares deal to buy fellow life insurance consolidator ReAssure, expecting the purchase to add £7bn in cash over time.

Swiss Re, the Zurich-based parent company of ReAssure, which had been looking to spin off the business into a standalone London listing earlier this year, has accepted a cash payment of £1.2bn from Phoenix, along with a 13%-17% stake and a seat on its board.

FTSE 100-listed Phoenix, which buys up and manages 'closed-book' pensions and life insurance policies from other insurers, said the acquisition will add another £84bn assets under administration, taking the enlarged group up to £329bn.

Phoenix chief executive Clive Bannister called it a “highly attractive acquisition” that will contribute £7bn of incremental cash generation provide the opportunity to capture “cost and capital synergies” of £2.7bn between 2020 and 2023.

A planned £3.3bn flotation of ReAssure was pulled by parent Swiss Re in July after weak demand from institutional investors.

The acquisition is expected to close in mid-2020, subject to approvals by Phoenix’s shareholders, regulators and competition authorities.

Christian Mumenthaler, chief executive of Swiss Re, said: “Phoenix is a natural acquirer of ReAssure and has a proven track record of delivering value to both shareholders and customers.” 

Quick facts: Phoenix Group Holdings PLC

Price: 744 GBX

LSE:PHNX
Market: LSE
Market Cap: £5.37 billion
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