Rothesay Life and MetLife have announced that Rothesay Life will acquire MetLife Assurance Limited (MetLife Assurance), a subsidiary of MetLife. The acquisition is expected to be completed in the second quarter of 2014, subject to regulatory approval and satisfaction of other closing conditions. The terms of the agreement were not disclosed.
Since the start of 2013, Rothesay Life has concluded £1.8 billion of transactions, including pensioner buy-ins with Philips (£484 million), Cobham (£280 million) and Smith & Nephew (£190 million) and a buyout with InterContinental Hotels (£440 million) with total business written now covering in excess of 165,000 members. Macro-economic and demographic factors are set to drive demand and Rothesay Life expects there to be further long term expansion in pension insurance buyouts and buy-ins.
Established in 2007, MetLife Assurance has been a well-known and successful supplier of bulk annuities in the U.K. and Irish markets, securing the benefits of more than 20,000 members. It maintains the capital standards and prudent reserves required by the Prudential Regulation Authority to safeguard all of its customer benefits and, as such, benefit obligations to trustees and pension payments to individual policyholders will not be affected by this sale.
The decision by MetLife to sell MetLife Assurance does not involve MetLife’s other businesses in the U.K., in particular the U.K. wealth management and employee benefits business (MetLife Europe Limited), or MetLife’s U.S. pension risk transfer business.
MetLife’s financial adviser for this transaction is Citigroup Capital Markets Inc. and the company’s legal adviser is CMS Cameron McKenna LLP. Rothesay Life’s financial adviser for this transaction is Goldman Sachs and the company’s legal adviser is Linklaters LLP.
Addy Loudiadis, CEO of Rothesay Life, said:
"The acquisition of MetLife Assurance makes Rothesay Life the U.K.’s largest dedicated provider of defined benefit de-risking solutions, with over £10 billion of assets under management.
“The U.K. pension de-risking market has experienced recent strong growth, with transaction levels approaching the 2008 high. The acquisition of the £3 billion MetLife Assurance annuity portfolio follows the acquisition of Paternoster in 2011 and builds on Rothesay’s strong organic growth track record, taking transactions since the start of 2013 to £4.8 billion. The deal comes just after the successful diversification of the investor base, with Blackstone, GIC and MassMutual joining Goldman Sachs as shareholders.
Rothesay Life has an exciting future capitalising on a reputation for providing innovative pension solutions to U.K. pension funds and their sponsors. MetLife Assurance’s customers can be assured their pensions will continue to be paid by a secure and well-capitalised insurer.”
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