Clive Bannister, Phoenix Group CEO

The deal adds £84 billion of assets under administration and over 4 million policies to Phoenix which employs approaching 3,000 staff in Scotland.

The deal marks Phoenix’s largest acquisition.

The acquisition also brings additional scale to Phoenix’s Heritage business, creating an enlarged group with £329 billion of assets under administration(2,4) and 14.1 million policies confirming Phoenix’s position as the largest life and pensions consolidator in Europe.

The deal is also expected to generate a total of £7.0 billion of additional aggregate cash flows taking total long-term cash generation(1) of the enlarged Group to £19.0 billion.

This additional cash generation supports a proposed 3% increase in the dividend per share, payable from and including the 2020 final dividend.

Commenting on the acquisition, Phoenix Group CEO, Clive Bannister, said: “This is a highly attractive acquisition for Phoenix that follows our growth strategy and delivers value to our shareholders. The acquisition will contribute £7 billion of incremental cash generation and give us the opportunity to capture significant cost and capital synergies. The purchase price, at 91% of ReAssure’s pro-forma Solvency II Own Funds, is attractive; as is the efficient financing structure. Together, this enables us to maintain our balance sheet strength.

“The deal confirms Phoenix’s position as Europe’s largest life and pensions consolidator with £329 billion of assets under administration and 14.1 million policies and will give us an enhanced platform to pursue further growth opportunities, including Bulk Purchase Annuities. We also welcome Swiss Re and MS&AD as significant new shareholders and see their investment as a recognition of the many benefits that this combination can bring.”

Keith Skeoch, CEO, Standard Life Aberdeen, said: “Today’s announcement by Phoenix illustrates the substantial consolidation opportunities that exist within the UK and European insurance sectors which was a key factor in our making our strategic investment in Phoenix.

“As a leading provider of investment solutions to both Phoenix and ReAssure we will be working with Phoenix to understand the additional opportunities that the proposed acquisition creates for Standard Life Aberdeen.”