Phoenix confirms it is talking to owner Deutsche Bank about acquisition
There has been a wave of consolidation across the life insurance industry
Published: 05:14 EDT, 16 September 2016 | Updated: 05:29 EDT, 16 September 2016>
British closed-book insurance firm Phoenix Group has confirmed it is in 'advanced discussions' over buying Abbey Life Assurance from Germany's Deutsche Bank.
According to news agency Reuters, the UK firm is planning to raise £800million to fund the purchase which will be finalised in the next couple of weeks.
Phoenix Group said, simply, in a statement today: 'Phoenix is in advanced discussions with Deutsche Bank in relation to a possible acquisition of Abbey Life. There can be no certainty that these discussions will lead to a transaction.'
On the block: Abbey Life, owned by Deutsche Bank, is in the sights of Phoenix Group
Murmurs about a potential deal first arose back in April, with FTSE 100-listed Legal & General and reinsurer Swiss Re also thought to be interested at the time.
Phoenix chief executive Clive Bannister has previously said that he'd be interested in buying Abbey Life if the unit was put up for sale.
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There has been a wave of consolidation in the life insurance industry in recent months and this is expected to continue in the coming years.
Regulatory changes and rock bottom interest rates had ramped up pressure on industry players to deal with their legacy books, leading many to consider putting them up for sale.
The interest rate cut that followed Britain's vote to leave the European Union has also squeezed returns on investments for companies that manage closed life insurers.
Felling the heat: Deutsche boss John Cryan is under pressure to shore up earnings and bolster capital buffers at the German lender
In May, Phoenix completed the purchase of French firm Axa's UK pension and protection business for £375million, partly funded through a share placement.
Back in January, Deutsche Bank said it was reviewing options for Abbey Life, with chief executive John Cryan under pressure to shore up earnings and bolster capital buffers at the German lender.
Abbey Life is among several UK life assurance businesses that are being investigated by the Financial Conduct Authority over its practices on exit fees.
Phoenix Group shares on the FTSE 250 index were flat at 841.5p in mid morning trade.
Source : http://www.thisismoney.co.uk/money/markets/article-3792394/Abbey-Life-sale-Phoenix-nears-amid-wave-consolidation-insurers.html