ZURICH (Reuters) - Reinsurance group Swiss Re AG SRENH.VX will bolster its position as a leading closed life book consolidator in Britain through the acquisition of Guardian Financial Services, the Swiss group said on Wednesday.
Its business unit Admin Re has agreed to buy Guardian Financial Services from private equity firm Cinven [CINV.UL] for 1.6 billion pounds ($2.45 billion).
The acquisition would add 900,000 annuity, life insurance and pension policies in Britain and Ireland, boosting Admin Re’s UK business to over four million policies.
“The expected returns exceed our profitability targets for new business and represent an excellent fit with our Group strategy as well as with Admin Re’s capabilities and existing infrastructure,” Chief Executive Michel M. Lies said.
Admin Re is expected to generate around $1.7 billion of gross cash, including capital synergies, over the first three years, said Swiss Re. In addition, the assets under management of the Swiss Re Group would increase by 12.5 billion pounds, or about 15 percent.
Closing of the acquisition, which is subject to regulatory approval, could be completed in early 2016 and would be financed from cash on the balance sheet as well as debt financing.
($1 = 0.6518 pounds)
Reporting by Brenna Hughes Neghaiwi; Editing by Anand Basu and Stephen Coates