Regulator approves Skandia Liv purchase of Skandia AB

Finansinspektionen, the Swedish Financial Supervisory Authority, has approved the proposed acquisition of Skandia AB from Old Mutual by life insurance company Skandia Liv.

The decision came after a review, in which FI concluded it did not “constitute an unlawful value transfer from the life insurance company.”

The deal is complicated because Skandia Liv is a subsidiary of Skandia AB, which in turn is a subsidiary of UK-listed financial services company Old Mutual. As approved, the acquisition is intended to develop as follows:

1. Skandia Liv forms a foundation (Thule Foundation).
2. Skandia Liv transfers SEK25m to the Thule Foundation.
3. The Thule Foundation acquires all of the shares in Skandia Liv from Skandia AB at their nominal value, SEK0.6m.
4. Skandia Liv acquires all shares in Skandia AB from Old Mutual for SEK22.5bn.
5. Over time (within approximately one and a half years), the insurance operations in Skandia Liv will be transferred to a newly formed mutual insurance company.

For fund investors in Sweden the deal is important because it also encompasses the transfer of Skandia AB’s fund manager Skandia Fonder, which offers a range of over 30 products for both mutual fund investors as well as long-term savers investing in funds through the country’s PPM system.

Skandia AB reported results for its Nordic business today – excluding figures relating to the Skandia Liv business – which show funds under management fell -8% to SEK134.3bn in 2011 from SEK145.4bn in 2010. The company said this was because of falling stockmarkets last year.

New sales on an APE basis were up 6% to SEK2.4trn, while operating profit before tax according to IFRS AOP was SEK1.3trn, excluding one off costs and other issues.


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