Phoenix Group to buy Swiss Re’s British ReAssure unit for £3.2 billion
Phoenix Group’s acquisition of ReAssure is expected to bring in additional cash flows of about £7 billion
Phoenix Group Holdings is to buy the British insurance unit of Swiss Re AG in a cash-and-shares deal worth £3.2bn ($4.1bn, €3bn).
Phoenix Group, Europe’s largest owner of life assurance funds, said the acquisition of ReAssure is expected to bring in additional cash flows of about £7bn over time.
Swiss Re said it would get a cash payment of £1.2bn pounds and a 13 to 17 per cent stake in Phoenix.
ReAssure’s minority shareholder, Japan’s MS&AD Insurance Group Holdings, will receive shares representing an 11 to 15 per cent stake in the group.
Together, Swiss Re and MS&AD will own 28 per cent of Phoenix, and both companies will have a seat on the company’s board.
The proposed acquisition comes five months after Swiss Re backed out of the proposed $4.1bn flotation of ReAssure in London, citing lack of investor appetite.
Phoenix and ReAssure both specialise in buying up old books of life insurance business that other companies no longer want.
The companies also considered merging in 2013, but it did not go forward.
The transaction is expected to close in mid-2020.
Phoenix shares rose 1.5 per cent in early trading while Swiss Re shares increased 2.5 per cent.
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