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Wednesday, January 31, 2024

Phoenix Group to amass Solar Life in £248m deal

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Financial savings and retirement supplier Phoenix Group is to amass closed-book UK life insurer Solar Life UK in a deal price £248m.

The deal will probably be funded from present money sources.

The acquisition is topic to regulatory approvals and anticipated to finish within the first quarter of subsequent 12 months.

At 31 December 2021, Solar Life UK had 480,000 in-force insurance policies and £10bn of property underneath administration, of which £2.5bn are annuities that can stay reinsured with Solar Life.

As a part of the deal the financial savings and retirement supplier has agreed a long-term strategic asset administration partnership with the Solar Life group to boost its presence in North America.

Solar Life UK presently operates a predominantly outsourced enterprise mannequin, with the vast majority of coverage admin outsourced. Phoenix stated that it will permit them to ship round £125m of integration synergies, web of prices, from value efficiencies and capital administration.

Phoenix stated the acquisition is anticipated to ship round £470m in long-term money technology, with roughly 30% of this to happen within the first three years.

The acquisition is considered one of a number of revamped the previous two years by Phoenix, however the first to be financed solely from present money sources.

Customary Life Aberdeen bought its Customary Life model to Phoenix Group in February 2021 as a part of a branding evaluation of all its companies.

Andy Briggs, CEO of Phoenix Group, stated: “The acquisition of Solar Life UK is very engaging for Phoenix Group and demonstrates the numerous worth that smaller money funded M&A transactions can ship for our shareholders. We anticipate this acquisition to ship incremental long-term money technology of round £470 million, inclusive of value and capital synergies. This helps a 2.5% dividend enhance, in step with our ambition to sustainably develop our dividend over time.

“We welcome the colleagues who will be part of us from Solar Life UK, and because the UK’s largest long-term financial savings and retirement enterprise with a powerful monitor document of closed e-book integrations, we stay up for providing a protected house for Solar Life UK’s clients over the long run. I’m happy that we are going to additionally have the ability to provide Solar Life UK’s clients entry to our broad vary of Customary Life merchandise in our open division.”

Phoenix sees M&A as a strategic precedence and the financial savings and retirement supplier stated it continues to search for additional acquisitions.

It additionally proposed a 2.5% enhance to its ultimate dividend because of the Solar Life deal, topic to completion.

Phoenix stated this “demonstrates the numerous worth to shareholders of smaller, money funded M&A”.

Phoenix rebranded its visible id earlier this 12 months to mirror its extra consumer-led model.

The supplier stated its “new and trendy visible id” would offer the inspiration for stronger model engagement

The Phoenix Group has developed from a conventional closed-book consolidator to an organization with rising client manufacturers.

Phoenix claims to be the UK’s largest long-term financial savings and retirement enterprise, with £300bn of property underneath administration and round 13m clients.


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