Phoenix Group To Purchase Sun Life UK For £248 Million
Phoenix Group To Purchase Sun Life UK For £248 Million
Phoenix Group, a life insurance conglomerate, has agreed to pay £248 million in existing cash resources to buy Sun Life UK, a closed book life insurance firm in the United Kingdom.
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A total of £470 million in additional long-term cash creation is anticipated from the purchase, with the first three years accounting for about 30% of this total.
The majority of Sun Life UK’s policy administration is already handled by TCS Diligenta, Phoenix’s strategic outsourcing partner, which supports a streamlined operational integration program. Sun Life UK works mostly through outsourcing.
As a result, the business aims to produce integration synergies of close to £125 million, net of costs, from cost reductions and capital management initiatives, accounting for around half of the consideration paid.
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Phoenix Group To Purchase Sun Life UK For £248 Million
Phoenix and Sun Life have also committed to a new long-term strategic asset management agreement that will strengthen the group’s current alliances. Building on Sun Life’s footprint in the region, this should strengthen and diversify North America’s liquid and illiquid loan origination capabilities.
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Regulatory permissions are required, and the acquisition is anticipated to close in the first quarter of 2023. Additionally, it approves a 2.5% inorganic dividend increase, which will be paid beginning with the final dividend of 2022.
Out of the anticipated £480 billion UK Heritage M&A market, Sun Life UK accounts for about £10 billion.
Phoenix claims that this is the first acquisition made by the firm that was entirely funded by cash on hand, demonstrating the excess cash and capital available for growth-related investing.
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M&A is a strategic goal for the group’s Board moving ahead and a key component of the Group’s growth plan, according to Phoenix.
Phoenix Group To Purchase Sun Life UK For £248 Million
Andy Briggs, Phoenix Group CEO, commented:”The acquisition of Sun Life UK is highly attractive for Phoenix Group and demonstrates the significant value that smaller cash funded M&A transactions can deliver for our shareholders.
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“We welcome the colleagues who will join us from Sun Life UK, and as the UK’s largest long-term savings and retirement business with a strong track record of closed book integrations, we look forward to offering a safe home for Sun Life UK’s customers over the long term.
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“I am pleased that we will also be able to offer Sun Life UK’s customers access to our broad range of Standard Life products in our Open division.
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