Phoenix Group Holdings, Britain's largest owner of life assurance funds closed to new customers, said it would buy French insurer Axa's UK investment and pensions business and its direct protection business.
Phoenix said on Friday it would be pay 375 million pounds ($549 million) in cash to close the deal, which would add 12.3 billion pounds of assets under management and over 910,000 policies to its business.
The deal would expected to generate cash flows of about 300 million pounds between 2016 and 2020 and 200 million pounds from 2021 onwards, Phoenix said, adding that it would boost its final 2016 dividend by 5 percent to 28 pence per share.
Phoenix shares were up about 2 percent at 866.5 pence at 0737 GMT, making them the top percentage gainers on London's FTSE 250 midcap index on Friday.
New European capital rules for insurers known as Solvency II that came into play in January have increased the cost of running life insurance businesses, forcing many firms to divest some businesses to boost their cash positions.
Axa said separately that it expects to book a 400 million euro ($447 million) net loss on these transactions, and that the deal is expected to be finalised in the second half of 2016.
The French company said its series of UK divestments, which include the sale of its platform business 'Elevate' to Standard Life and its ofshore investment bonds business to Life Company Consolidation Group, would raise a total of 632 million pounds.
Earlier this week, Britain's Legal & General Group said it would buy 3 billion pounds of annuity liabilities from Dutch insurer Aegon. (Reuters)
Source: www.businessworld.ie
