The Swiss Re Group on Wednesday announced that its Admin Re unit has agreed to acquire Guardian Holdings Europe Ltd, the holding company for operations trading under the name Guardian Financial Services, from private equity company Cinven for GBP1.6 billion.
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According to Swiss Re, the expected returns exceed its profitability targets for new business and represent an excellent fit with its strategy as well as with Admin Re’s capabilities and existing infrastructure.
The acquisition helps Swiss Re’s Admin Re build out its portfolio of life insurance policies, Swiss Re said in a statement Wednesday.
Phoenix’s Chief Executive Officer Cliver Bannister and other firms including Royal London Group have said they expect to see similar businesses be put up for sale as the new capital rules, known as Solvency II, come into effect in January.
Bob Ratcliffe, CEO of Admin Re®, says: “We’re very proud to be taking on Guardian’s policyholders and staff delivering the same seamless service that we bring to our current 3.4 million customers”.
“This is a large size deal for them”, Ming Zhu, an analyst at Canaccord Genuity, said by phone. At the same time, the Guardian acquisition boosts the assets under management of the Swiss Re Group, which grow by GBP£12.5 billion, or approximately 15%.
Admin Re said cash on its balance sheet as well as debt financing would be used to purchase Guardian. Guardian now has around £20bn of assets under management.
He added that the group will continue to eye further acquisitions in the United Kingdom closed life sector.
The deal, which is subject to regulatory approval, won’t affect the company’s share buyback program, he said.
Swiss Re shares were settled at 82.35 Swiss francs on Tuesday.
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Cinven bought Guardian from Dutch insurer Aegon NV for 275 million pounds in 2011 and made three acquisitions of closed insurance businesses since then.
