Mubasher: Reinsurance company Swiss Re agreed to sell its UK subsidiary for pension giant Phoenix Group for GBP 3.25 billion ($4.27 billion) in cash and shares, according to the former’s statement.
Under the deal, Swiss Re will receive GBP 1.2 billion in cash, and a stake in Phoenix of 13% to 17%, while ReAssure’s minority shareholder, MS&AD Insurance Group will receive shares in the UK insurer representing an 11% to 15% stake.
The number of shares to be received by the Swiss reinsurance giant and MS&AD, which will be fixed at an around 28% of Phoenix, will depend on the company’s share price at closing of the sale.
The deal is set to maximise Phoenix position as Europe’s biggest life and pensions consolidator, with GBP 329 billion of assets under administration, and over 14.1 million policies.
“The strategic rationale for the combination of the businesses is compelling, and we look forward to working together with Phoenix and to sharing the financial benefits of the combination,” Swiss Re’s CEO Christian Mumenthaler said.
The transaction, due to be concluded in mid-2020, will positively impact its Group Swiss Solvency Test (SST) ratio and economic profit and a negative impact on its US GAAP results in the fourth quarter of this year, Swiss Re said.