Phoenix in ‘advanced’ £800m talks to buy Deutsche’s Abbey Life

Phoenix Group has confirmed that it is in “advanced” talks with Deutsche Bank about acquiring the German lender’s UK insurance business, Abbey Life.

Phoenix, the UK’s largest owner of life assurance funds that are closed to new customers, is planning to raise £800m ($US105bn) to fund the purchase, which is expected to be finalised in the next couple of weeks, according to reports from Reuters.

In a statement published on its website today, Phoenix Group Holdings said that it was in “advanced discussions” regarding a possible acquisition of Abbey Life Assurance Company Ltd and confirmed that it is evaluating a potential transaction. 

The statement said: “As stated at the time of the interim results on 25 August, Phoenix continues to explore further acquisition opportunities in the UK closed life sector. In this context, Phoenix is in advanced discussions with Deutsche Bank in relation to a possible acquisition of Abbey Life.” 

Phoenix added there can be “no certainty that these discussions will lead to a transaction,” but promised that any further announcement will be made “as and when appropriate”.

Spate of consolidation activity

There has been a spate of consolidation activity in recent months, as reported, and this is expected to continue in the coming years. In May, as reported, Phoenix snapped up Axa’s pensions and protection business for £375m in cash.

Currently Phoenix and Admin Re, owned by Swiss Re, are the two big consolidators in the sector, and both are expected to vie for more business acquisitions in the coming years.

In March this year, the Financial Conduct Authority confirmed an investigation into Abbey Life’s treatment of their closed-book life insurance customers after it found they had failed to inform their customers about exit charges on some of its policies. This might lead to compensation payments to policyholders or fines for the UK insurer.

Name change

Based in London, Phoenix Group is a FTSE 250-listed, closed-life insurance fund consolidator that specialises in the management and acquisition of closed life and pension funds. It changed its name from Pearl Group in 2010.

Phoenix Group is headed up by group chief executive Clive Bannister, who joined the company from HSBC, where he had been group managing director of insurance and asset management.

To see a timeline detailing the history of Phoenix Group Holdings, which dates back to 1864 and a company originally called Pearl Life Assurance Loan and Investment Co Ltd,  click here.

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